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Mylan (MYL) Q2 Earnings Beat Estimates, Revenues Fall Y/Y

Zacks Equity Research
·4-min read

Mylan, Inc. MYL reported adjusted earnings of $1.11 per share for the second quarter of 2020, beating the Zacks Consensus Estimate of 95 cents. Also, the bottom line improved from the year-ago quarter’s $1.03.

Further, quarterly revenues of $2.73 billion beat the Zacks Consensus Estimate of $2.70 billion. However, revenues decreased 4% reportedly and 2% at constant exchange rate (CER) from the prior-year quarter. This downside was primarily due to lower pricing and volumes from net sales of existing products. Per the company, the COVID-19 pandemic unfavorably impacted net sales in the reported quarter, especially in Europe and Rest of World, thanks to weak retail pharmacy demand, fewer non-COVID-19 related patient hospital visits and a decline in meetings with prescribers and payors.

Shares of Mylan have lost 16% so far this year compared with the industry’s decrease of 3.9%.


Quarter in Detail

The company posts results under three segments on a geographic basis, namely North America, Europe and the Rest of the World.

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The North America segment’s net sales came in at $1.04 billion, up 2% year over year. This increase was primarily driven by higher volumes of existing products and partially on new product sales.  Expansion in volumes was primarily boosted by expected growth of Yupelri, Inhub and Wixela.

Net sales in the Europe segment came in at $935 million, down 6% year on year. This downtrend was primarily due to soft volumes from net sales of existing products due to COVID-19 adversity, the unfavorable impact of foreign currency and to a lesser extent, lower pricing of sales of existing products.

The Rest of the World segment’s net sales of $721.9 million fell 10% due to the unfavorable impact of foreign currency translation and the negative impact from COVID-19 in China.  In addition, net sales of existing products were affected by lower pricing, primarily because of government price cuts in Australia and Japan.

Adjusted gross margin of 54% was flat with the year-ago quarter’s level.

2020 Guidance

Due to the unfavorable impact of the COVID-19 pandemic, Mylan tightened its full-year guidance and expects a similar adverse impact on the second half of 2020. Revenues are now projected between $11.5 billion and $12 billion. The Zacks Consensus Estimate stands at $12.10 billion.

Our Take

Mylan’s second-quarter earnings and revenues beat estimates. The coronavirus outbreak and the subsequent lockdown negatively impacted customer buying patterns. However, Wixela Inhub, the generic of GlaxoSmithKline’s GSK Advair Diskus, and Yupelri, developed in collaboration with Theravance Biopharma, continued to boost growth.

In June, the FDA approved the new drug application (NDA) for Semglee (insulin glargine injection), in vial and pre-filled pen presentations, to control high blood sugar in adults with type 2 diabetes as well as adult and pediatric patients with type 1 diabetes. Mylan and partner Lupin also obtained the Marketing Authorization for Nepexto, a biosimilar of Enbrel, in Europe.

Moreover, in June, Mylan secured the district court’s decision against Biogen's BIIB multiple sclerosis (MS) drug Tecfidera’s (dimethyl fumarate) patent. This win clears the decks for Mylan's dimethyl fumarate product launch upon the receipt of a potential FDA approval. Otherwise, generics’ availability would have faced challenges until 2028. This should be a huge boost to the company and bode well for the future quarters.

Meanwhile, the company’s decision to merge with Upjohn, Pfizer's PFE off-patent branded and generic established medicines business, is also encouraging. In November 2019, Mylan and Pfizer announced the name of their new entity to be Viatris. The transaction is expected to close in the fourth quarter of 2020.

Mylan, Inc. Price, Consensus and EPS Surprise


Mylan, Inc. price-consensus-eps-surprise-chart | Mylan, Inc. Quote

Zacks Rank

Mylan currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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