Mylan (MYL, Financial) released its third-quarter earnings Wednesday, reporting a quarterly loss and revenue growth that was below expectations.
Mylan has been embroiled in controversy in regard to its pricing practices. The U.S. Department of Justice has been investigating the company’s pricing of EpiPens. The company reached a $465 million settlement for allegations that Medicaid overpaid the company for the lifesaving medication. The settlement caused the company to report a loss of 23 cents per share ($119.8 million), down from a profit of 83 cents last year ($428.6 million).
The New York Post reported Tuesday that the company may have overcharged the Department of Defense for EpiPens that would be available to American troops. This led several senators to demand the company reimburse the government.
Bill Ackman (Trades, Portfolio)’s Valeant Pharmaceuticals (VRX, Financial) began a wave of investigations when its business practices were brought under scrutiny in 2015. Valeant reported its earnings Tuesday and lowered its full-year outlook. The company missed estimates, and the stock fell 30%.
Getting back to Mylan, the Pennsylvania-based pharmaceutical company reported adjusted EPS of $1.38 on revenues of $3.06 billion for the quarter. In comparison, analysts expected EPS of $1.45 on $3.12 billion.
Mylan also projected the full-year adjusted earnings of $4.70 to $4.90 per share. This is down from the previous guidance of $4.85 to $5.15.
Impacted by Mylan’s acquisition of Meda AB (MDABF, Financial) and the generic and specialty topicals business of Renaissance Acquistion Holdings, generic drugs revenue increased 17% to $2.61 billion. In contrast, sales in its smaller specialty business fell 4.4% to $418.7 million due to lower EpiPen volumes.
The Vanguard Health Care Fund (Trades, Portfolio) is Mylan’s largest shareholder among the gurus with 5.5% of outstanding shares, which is 2.4% of its total assets managed. John Paulson (Trades, Portfolio), David Einhorn (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Scott Black (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) also hold positions.
The stock is down more than 27% year to date but has recently rebounded. Shares were up over 8% in the past month and up over 2% this quarter.
The DCF Calculator gives the stock a fair value of $16.8; it was trading at $39.68 on Thursday.
Disclosure: I do not own stock in any companies mentioned in the article.
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