After all of the drama last year, when Mylan Pharmaceuticals outraged the country by increasing the price of a life-saving Epipen injector to $700 – a 500% increase over a decade, it looks like the company is finally feeling some pain.
And that punishment didn’t come from the Congressional hearings or public shaming of CEO Heather Bresch national media. It came from the market – as ever, unforgiving.
On Wednesday, Mylan reported its second-quarter earnings, and they were disastrous.
Here’s a rundown of some of the uglier points:
- Epipen sales fell by $172 million. Overall company revenue missed Wells Fargo’s expectations of $3.08 billion, coming in at $2.96 billion. The company lowered its full year 2018 earnings per share target from $6 to $5.40. North America revenues fell 9% (Wells Fargo points out that, organically it fell 19%). Mylan also says it will delay all US product launches planned for 2017 to 2018. The company spent $35 million on legal fees.
“Given the organic challenges in the business, including the delay of major product launches, this robust growth seems unrealistic without a contribution from deals,” wrote Wells Fargo analyst David Maris in a note following the company’s results.
Those “organic challenges” all derive from competition. In Epipen’s case it’s from Mylan’s own authorized generic and outside competition, as well as an increase in government rebates the company has to pay. According to reports, Mylan has been trying to fend off this competition with at least some success.
As for the rest of its generic portfolio, Mylan expects sales to fall in the high single digits in North America for the rest of 2017.
Now to be fair, the entire generic drug industry has been getting whalloped this quarter. Same store sales at CVS Pharmacy decreased 2.8%, and blamed the decline on the introduction of cheaper generic products. Teva Pharmaceuticals cut guidance. Mallinckrodt, which reported on Tuesday, said that its specialty generics unit experienced an 18% decline in sales.