Transcript CR-3A MYL Watch List Presentation Example

Mylan Laboratories Inc.
(MYL)
Solomon Lee, Analyst
Graduation Date: April 2008
Background Information
Generic Drug Manufacturer
Mylan Pharmaceuticals:
Mylan Technologies:
UDL Laboratories:
Solid oral-dosage and time-release products
Industry leader in transdermal research
Number one supplier of unit-dose medication
to hospitals and other institutions
Key Facts
1) Distributes products mainly in U.S
2) $100 million upgrade on primary
research and development facility
3) Third largest generic drug maker
4) Operations in Pennslyvania, West
Virginia, Vermont, Illinois
Major Product Lines
Calcium Channel Blockers
(Nifedpine)
Narcotic agonist analgesics
(Fentanyl)
17% of revenue in 2006
15% of revenue in 2006
Distributes and markets approximately 160 generic drugs
Positive Factors
• Pioneer in Transdermal Products
– The first generic class 2 narcotic transdermal
product approved by the FDA (fentanyl)
– No rival generic transdermal products has yet to
emerge
• Strategic Expansionary Initiatives
– Somerset Pharmaceuticals, Bertek Inc., Penederm
Inc., UDL Laboratories, King Pharmaceuticals
– Acquisition of Matrix Laboratories Ltd. in India
gives greater exposure to cheap labor and lucrative
Asia and European markets
• Steady Acquisition of ANDAs
– As of March 31, 2006, Mylan had 56 ANDAs and 5
supplemental ANDAs for new product strengths
pending FDA approval. 17 have been granted
tentative approval/approvable status.
Negative Factors
• Company Differentiation
– In the generic drug industry, limited barriers to
entry exist
– Prices are market driven and market determined
and can eat into profits
• Litigation Uncertainty
– Mylan is currently involved in several legal
proceedings that can have substantial effects on
profitability
– The outcome of the proceedings is relatively
uncertain
• Lack of Proprietary Patents
– Mylan has limited prominent proprietary or NDA
approvals. Mylan’s focus is primarily on
distributing generics products
– Strong dependency on expirations of patented drugs
Industry Tool Analysis
Summary
• Mylan is a prominent generic drug
manufacturer
• Mylan has taken steps to expand
geographically and into new markets
• Lack of proprietary advantages is
compensated for higher margins and
profitability
• Many inherent risk exist being in the
generic drug industry that could affect
profitability
• Mylan competes well against other
companies in its industry
Recommendation
Mylan Laboratories should
be added to the watch list