- Mylan's board of directors has convened a strategic review committee to assess a "wide range" of options, signaling the generic company is considering changes to its business as its North American unit suffers from a significant downturn.
- Few details were disclosed and the board has not set a timetable by which it hopes to complete its review. In a Wednesday statement, however, the board said it believed Mylan to be underappreciated and undervalued by U.S. public markets.
- Like other generic drugmakers, Mylan has felt the effects of falling prices and increased competition in the market for copycat medicines. Sales of EpiPen, its flagship epinephrine product, have also slumped.
Mylan's business is going in two different directions.
Sales have grown outside of the U.S., rising by 10% over the first six months of 2018 versus the same period last year. As Mylan notes, international markets now account for three-fifths of its global sales.
By contrast, revenues in North America fell 20% during the same time period, slumping lower on declining product volumes and ongoing price erosion. A restructuring at one of the company's manufacturing plants in Morgantown, West Virginia has had a "significantly negative impact on production levels, product supply and operations," Mylan said.
The company laid off more than 400 workers from the plant earlier this year.
Mylan now expects declines in the mid-teens for its North American business over the full year, cutting its overall sales guidance to project flat growth compared to 2017.
Investors appear to share that negative outlook — Mylan stock has declined by about 14% to date this year and is down by nearly half compared to its recent peak in April 2015. Some of those declines have been driven by the ongoing impact of blowback to Mylan's pricing of the epinephrine autoinjector EpiPen and its subsequent launch of an authorized generic.
The diverging growth trends appear to have prompted Mylan's board to weigh alternative paths forward.
"We believe that the U.S. public markets continue to underappreciate and undervalue the durability, differentiation and strengths of Mylan's global diversified business, especially when compared to our peers around the globe," Mylan's board of directors wrote in an Aug. 8 statement.
It's not clear what direction Mylan might go in, and the board noted in its statement that there "can be no assurance" an alternative will be implemented.
In recent quarters, Mylan has put more of a focus on its efforts to develop complex generic drugs and biosimilars, which offer higher margins than small molecule generics.
Its recent track record, however, is mixed. The generic maker has twice failed to secure approval of its knockoff version of GlaxoSmithKline's respiratory treatment Advair (fluticasone/salmetrol), which combines two active ingredients in an inhaled powder.
On the positive side of the ledger, Mylan secured an OK last fall for its copy of Teva Pharmaceutical's multiple sclerosis treatment Copaxone (glatiramer acetate) and recently launched its biosimilar of Amgen's Neulasta (pegfilgrastim).
"We are confident that our investments in these complex products will drive long-term growth for the company, despite some near-term market challenges in the U.S.," said Mylan president Rajiv Malik in its earnings release.