StockBeat: Mylan Slumps on Revenue Miss, Strategic Review No Show

© Reuters.

Mylan (NASDAQ:) slumped on Tuesday after delivering mixed quarterly results and failing to provide an update on its long-running strategic review.

Mylan reported first-quarter earnings of $0.82 a share, beating for earnings of $0.79, but revenue of $2.5 billion missed estimates of $2.7 billion, sending the shares down more than 18%. Because of the stock price slump, Mylan shares are now down nearly 16% for the year and are off 46% from their 52-week high.

The company also revealed that attorneys general from several states intend to file a complaint against the drug maker alleging anticompetitive practices concerning some of its generic drugs.

But it’s not the first time Mylan has ended up on the wrong side of antitrust laws.

The drugmaker is facing a class-action suit over its EpiPen allergy treatment as plaintiffs claim the rebate program “blocked Sanofi (PA:) from accessing a significant portion of the market for epinephrine autoinjectors,” U.S. District Judge J. Paul Oetken ruled late last year.

There was more drama to come as the company, during the post-earnings call, said that conclusions from its strategic view should be available in the “near-term,” after previously announcing last quarter that the review was in the final stages.

That seemingly has sparked speculation among investors that the company is still undecided on the best way forward amid falling sales of generic drugs in North America and slowing sales of its EpiPen.

Analysts have touted three possible options available to drug maker, including a classic restructuring, a leverage buyout or an acquisition or merger.

Sales in North America fell 6% to $922.9 million in the first-quarter “primarily driven by changes in the competitive environment and the impact of the Morgantown plant remediation activities,” Mylan said.

Yet, there are some on Wall Street who continue to back the drug maker.

“While Q1 sales growth was well below our expectation, we still think 2019 revenue can increase about 5% vs. 2018 on strong ramps of generic Advair, biosimilar Neulasta and several other new launches in 2H 2019,” said CFRA, the independent research provider.

“We continue to think shares are an attractive value with the low end of 2019 (free cash flow) guidance representing a 16% yield on current market cap, and FCF growth expected over the long-term.”

Mylan reaffirmed a full-year adjusted free cash flow range of $1.9 billion to $2.3 billion.

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