Mylan N.V. MYL recently suffered a huge setback. The company received a complete response letter from the FDA regarding its abbreviated new drug application (ANDA) for the generic version of GlaxoSmithKline's GSK asthma drug Advair Diskus.
The company is in the process of reviewing this response letter and will provide an update on its application at the earliest. Mylan also has plans to complete its review and discuss the FDA's feedback with the agency.
We note that shares of Mylan have performed better than the Zacks categorized Medical-Generic Drugs industry in the past year with the stock losing 17.5% compared with the industry’s decline of 22.2%.
The CRL disappointed investors. A probable approval would have boosted Mylan’s generic portfolio immensely given the potential market for the same. Advair generated sales of £1.8 billion.
The CRL also puts a question mark on Mylan’s 2017 guidance. Concurrent with the fourth-quarter results earlier in the month, Mylan projected revenues between $12.25 billion and $13.75 billion in 2017.
We note that Mylan has been under immense pressure since Aug 2016 when the company faced criticism for the price increase of EpiPen since its acquisition of the drug in 2007 from lawmakers, consumers and the common people alike. The pricing controversy even led to a congressional hearing and attracted immense censure.
Also, right after the pricing issue, Mylan made it to the headlines for wrongly classifying EpiPen as a generic product in the Medicaid Drug Rebate Program. The misclassification implied that Mylan has been greatly underpaying rebates to Medicaid for the drug for a long time than it would have if the drug was classified as a branded one.
The guidance for 2017 was a silver lining in the clouds. However, with the company’s ANDA for Advair being served a CRL, it might be a daunting task for the company hereafter.
We remind investors that Hikma Pharmaceuticals PLC has also submitted its ANDA for its generic version of Advair to the FDA. A decision is expected on May 10, 2017.
Meanwhile, we note that Mylan’s biologics license application for a biosimilar version of Amgen’s AMGN Neulasta (pegfilgrastim) and a biosimilar version of Roche’s RHHBY Herceptin is also under FDA’s review.
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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