Wells Fargo analyst David Maris weighed in on Mylan (NASDAQ: MYL) after a CMS spokesperson was quoted by CNBC that, "CMS has, on multiple occasions, provided guidance to the industry and Mylan on the proper classification of drugs, and has expressly advised Mylan that their classification of EpiPen for the purposes of the Medicaid Drug Rebate Program was incorrect." In addition, CNBC cites the Minnesota state health department as estimating this misclassification may have cost Minnesota $4.3 million so far this year.

Maris said if this is true and indicative of the relative costs at other states, they believe the misclassification could be sizable for Mylan, as Minnesota represents less than 2% of the U.S. population.

The analyst expects next steps will be Mylan’s submission of data and information to the panel’s request (this week), and potentially other hearings in the months to come. They are keeping October 12th circled as they expect the Senators will hear from the U.S. Attorney by then.

Maris said they are not aware of Mylan having reaffirmed earnings guidance since this issue has broken out, so are uncertain whether 2016 still stands, although since the EpiPen generic has not been launched, they do not know why it would not still be
valid.

The analyst said they continue to believe the EpiPen situation is "far from over with Mylan and represents a risk to the shares."

The firm maintained a Market Perform rating and $43-$45 valuation range.

For an analyst ratings summary and ratings history on Mylan click here. For more ratings news on Mylan click here.

Shares of Mylan closed at $40.22 yesterday.