Mylan’s stock bounced back in midday trading Wednesday from lower-than-expected second quarter earnings after the company’s management said its generic drug Advair is not being delayed by further FDA-required studies.
After shares of the drug-maker dropped as far as 8 percent in premarket trading, Mylan’s CEO Heather Bresch clarified on a call with investors that delaying Advair’s launch to 2018 was due to the Food and Drug Administration reorganizing and changing its priorities.
“We see the administration as the barrier, and not the science,” Bresch said.
Mylan’s second-quarter earnings report missed estimates in what Bresch called “a tough quarter,” before adding more optimistically that the company is “managing for the long term.” Bresch believes the poor quarterly result was not a “permanent hit” but rather “a deferred one.”
The company reported total revenue of $2.96 billion and earnings per share of $1.10, missing estimates of $3.03 billion in revenues and EPS of $1.16, according to analysts surveyed by Thomson Reuters.
Mylan is coping with declining profitability and it adjusted annual earnings forecasts downward. An August 2016 report by the Government Accountability Office found that U.S. generic drug prices have been declining since 2010.
“To say that times are changing would be an understatement,” Besch said.
The competitiveness of the market has been a flash point for generic drug-makers, as Teva Pharmaceutical’s interim CEO Yitzhak Peterburg blamed his company’s recent poor performance on saturation.
“[Teva] experienced … greater competition as a result of an increase in generic drug approvals by the U.S. FDA,” Peterburg said in the earnings release. He added that “customer consolidation” hurt sales in the U.S., before saying competition hurt new product launches, some of which were delayed in the recent quarter.
Teva also missed top and bottom line estimates in its most recent earnings report.
Mylan’s stock is down more than 17 percent this year while Teva’s recent decline puts it about 51 percent lower over the same period.