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MYL

Mylan

$31.79

-0.21 (-0.66%)

, TEVA

Teva

$18.16

-0.135 (-0.74%)

10:28
08/09/17
08/09
10:28
08/09/17
10:28

Mylan continues slide as generic price slowdown hits results, outlook

Shares of Mylan (MYL) are sliding after the company reported worse than expected earnings for the quarter and cut its financial outlook for 2017 and 2018, citing a price slowdown in generic drugs. This comes just days after the stock was under pressure following a similar announcement from peer Teva Pharmaceutical (TEVA), which cut its own view and lowered its dividend as the prices it can charge for its generic products in the U.S. has been plunging. MYLAN RESULTS: This morning, Mylan reported second quarter earnings per share of $1.10 and revenue of $2.96B, below consensus of $1.16 and $3.04B, respectively. The company also said it now sees 2017 adjusted earnings per share of $4.30-$4.70 and revenue of $11.5B-$12.5B. For 2018, the company cut its adjusted earnings per share view to at least $5.40 from $6.00. CHALLENGING GENERIC ENVIRONMENT: Mylan said this morning that given ongoing challenges and the uncertain U.S. regulatory environment, "we have elected to defer all major U.S. launches from our full year 2017 financial guidance to 2018, including generic Advair and generic Copaxone." Furthermore, the company noted that it sees generic price erosion for 2017 of mid-single digits globally. "We [...] expect generic price erosion for the year of mid-single digits globally, with high-single-digit erosion expected in North America. Furthermore, we continue to make great progress on our key pipeline programs, and while we may experience delays, mostly in the U.S., in realizing some of these opportunities, our confidence in our ability to bring these important products to market and maximize their potential has not changed," it added. Mylan CEO Heather Bresch pointed out that, "Our industry, along with the entire healthcare sector, is at an inflection point. This is providing investors an opportunity to differentiate between pharmaceutical companies focused solely on generics and/or specialty medicines and those capable of delivering a broad and diverse portfolio across multiple channels in various geographies, which remains Mylan's strategy." PEER PRESSURE: Back on August 3, when Teva Pharmaceutical reported weaker than expected second quarter results, the company cited the performance of its U.S. Generics business and the continued deterioration in Venezuela as factors for its results and the lowering of its outlook for the remainder of the year. "In our U.S. Generics business, we experienced accelerated price erosion and decreased volume mainly due to customer consolidation, greater competition as a result of an increase in generic drug approvals by the U.S. FDA, and some new product launches that were either delayed or subjected to more competition. Given the current environment, we have had to take swift and decisive actions," Teva interim President and Ceo Yitzhak Peterburg, said. PRICE ACTION: In morning trading, shares of Mylan are fractionally lower near $32 per share, regaining some of their early losses. Since Teva reported, Mylan shares have declined from their August 2 closing price of $36.92.

MYL

Mylan

$31.79

-0.21 (-0.66%)

TEVA

Teva

$18.16

-0.135 (-0.74%)

  • 09

    Aug

  • 30

    Aug

  • 03

    Sep

  • 09

    Oct

MYL Mylan
$31.79

-0.21 (-0.66%)

08/09/17
BMOC
08/09/17
NO CHANGE
BMOC
Outperform
Mylan generic push outs 'disappointing, but not surprising,' says BMO Capital
BMO Capital analyst Gary Nachman said expectations for Mylan have been "very low" even before the company reported on its "challenging" second quarter. While the push out of generic Advair and Copaxone into 2018 is a disappointment, he believes this possibility has been the consensus view among investors. Nachman maintains an Outperform rating on Mylan shares.
08/09/17
WELS
08/09/17
NO CHANGE
Target $30
WELS
Market Perform
Mylan results, outlook confirm cautious stance on generics, says Wells Fargo
Wells Fargo analyst David Maris, who notes that he was cautious on the generic sector heading into Mylan's quarterly report, said the results and outlook communicated by the company have confirmed his caution. Maris, who lowered his 2017 and 2018 estimates for Mylan after the company cut its guidance and said they have elected to defer all major U.S. launches from their FY17 financial view, lowered his price target on the stock to $30 from $34.50. He keeps a Market Perform rating on Mylan.
08/09/17
RAJA
08/09/17
NO CHANGE
RAJA
Mylan shares more than reflect reset expectations, says Raymond James
Raymond James believes Mylan shares more than adequately reflect the magnitude of reset expectations and is confident, if management can gain confidence in revised 2018 earnings guidance, the stock can quickly bounce back to the mid-$30 range.
07/18/17
WELS
07/18/17
NO CHANGE
WELS
Market Perform
Novartis report has cautious read-through for Mylan, Teva, says Wells Fargo
Wells Fargo analyst David Maris noted that Novartis' (NVS) Sandoz unit is one of the world's largest generic drug makers and he believes the proper read-through from its report is that the U.S. generic market remains challenging and that investors should remain cautious on the generics space. Maris, who said he would not be surprised to see Mylan (MYL) or Teva (TEVA) weaker following Novartis' report, keeps Market Perform ratings on those two names.
TEVA Teva
$18.16

-0.135 (-0.74%)

08/07/17
08/07/17
DOWNGRADE

On The Fly: Top five analyst downgrades
Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Teva (TEVA) downgraded to Underweight from Equal Weight at Morgan Stanley with analyst David Risinger saying he underappreciated generic pricing pressure risks on Teva's dividend and expects declining earnings power, combined with high leverage equal to result in a longer recovery. 2. Cummins (CMI) downgraded to Buy from Conviction Buy at Goldman Sachs. 3. RE/MAX Holdings (RMAX) downgraded to Equal Weight from Overweight at Stephens. 4. Intrepid Potash (IPI) downgraded to Sell from Neutral at UBS with analyst John Roberts saying that while bankruptcy risk has been "significantly reduced" since the share count was increased 60% with the March secondary, he remains concerned about the lack of long term growth in non-core income and "still depressed" core potash related income. Roberts cites valuation for his downgrade and raised his price target for Intrepid Potash shares to $2.50 from $2.00. 5. Eaton (ETN) downgraded to In Line from Outperform at Evercore ISI. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
08/07/17
MSCO
08/07/17
DOWNGRADE
Target $16
MSCO
Teva downgraded to Underweight, bear case target $9 at Morgan Stanley
As previously reported, Morgan Stanley downgraded Teva to Underweight from Equal Weight and cut its price target to $16 from $36. Analyst David Risinger said he underappreciated generic pricing pressure risks on Teva's dividend and expects declining earnings power, combined with high leverage equal to result in a longer recovery. He expects core business generic headwinds and Copaxone generic competition to pressure Teva's long-term earnings power and cut his 2017 earnings estimate to $1.24 from $1.55, 2018 earnings estimate to $4.14 from $4.56, and 2019 earnings estimate to $3.79 from $4.50. Risinger's bear case price target on Teva is $9, which assumes much more severe Copaxone erosion and generic business downside.
08/07/17
MSCO
08/07/17
DOWNGRADE
MSCO
Underweight
Teva downgraded to Underweight from Equal Weight at Morgan Stanley
08/04/17
08/04/17
DOWNGRADE

On The Fly: Top five analyst downgrades
Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Fluor (FLR) was downgraded to Hold from Buy at Deutsche Bank and to Neutral from Buy at DA Davidson. 2. Teva (TEVA) was downgraded to Market Perform from Outperform at Cowen, to Neutral from Outperform at Credit Suisse, and to Underperform from Outperform at RBC Capital. 3. Ford (F) downgraded to Neutral from Buy at Nomura Instinet with analyst Anindya Das citing uncertainties surrounding North America and European growth. 4. Avon Products (AVP) downgraded to Hold from Buy at Deutsche Bank with analyst Faiza Alwy saying the Chief Executive Officer change suggests that a business recovery, should there be one, is more than 12 months away. 5. CommScope (COMM) was downgraded to Hold from Buy at Cross Research, to Neutral from Buy at Longbow, and to Equal Weight from Overweight at Barclays. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

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