mylan nv swung to a quarterly loss as it booked a charge related to a settlement with u.s. authorities on pricing of its epipen. revenue growth was below expectations as volumes of the lifesaving auto-injector fell. the quarter<u+2019>s results gave the first indication of the impact of the epipen pricing controversy, which triggered a congressional hearing and the $465 million settlement to resolve allegations that medicaid overpaid mylan. the company said sales were down 4% for the segment that includes epipen, to $418 million, due to wholesalers cutting back purchases in anticipation of mylan selling an authorized generic at half the branded product<u+2019>s price. <u+201c>i wish we had anticipated<u+201d> the burden facing some patients who have high out-of-pocket costs under their health plans, chief executive heather bresch said on an earnings conference call on wednesday. the drug payment system, she added, <u+201c>needs to be completely reinvented.<u+201d> she said mylan would begin selling the authorized generic epipen, at a list price of $300, in the first half of december. shares slipped a fraction in after-hours trading. earlier in the day, the stock had joined a rally among pharmaceutical companies following donald trump <u+2019>s victory in tuesday<u+2019>s presidential election. mylan shares closed up 4.9% at $38.92, lifted on expectations that mr. trump<u+2019>s election and republican control of congress would lessen the chances of government restrictions on drug prices<u+2014>a prospect that seemed on the rise in response to a public backlash against escalating prescription costs over the past few years. as mylan<u+2019>s best-selling product with fat profit margins, the anti-allergy injection epipen has catapulted the company<u+2019>s specialty drug revenue. analysts expect it to hit $1.35 billion this year, more than double what it was five years ago. a mylan spokeswoman declined to elaborate because it hasn<u+2019>t given 2017 revenue guidance, while pointing to the company<u+2019>s previous statement that epipen would account for about 5% of 2018 revenue. on a conference call, mylan executives spoke about the pricing pressures facing the drug industry, including a squeeze on prices for generic drugs that compose the bulk of the company<u+2019>s portfolio. president rajiv malik said mylan continues to see pricing across its generics portfolio in line with expectations. <u+201c>we continue to anticipate price erosion in the mid-single digits for the remainder of the year,<u+201d> he said. in its sec filing, mylan provided more detail about a justice department investigation into pricing of generic drugs, saying a subsidiary <u+201c>as well as certain employees and a member of senior management<u+201d> received subpoenas regarding the <u+201c>marketing, pricing and sale of our generic cidofovir, glipizide-metformin, propranolol and verapamil products and any communications with competitors about such products. prosecutors are investigating whether certain generic-drug companies colluded on price, the wall street journal has reported. chief commercial officer anthony mauro said mylan<u+2019>s business <u+201c>has never been based on price increases for growth.<u+201d> mylan posted a quarterly loss of $119.8 million, or 23 cents a share, compared with a profit of $428.6 million, or 83 cents a share, a year ago. adjusted earnings fell to $1.38 a share. revenue climbed 13% to $3.06 billion. analysts were looking for $1.45 in adjusted earnings per share on $3.12 billion in revenue, according to thomson reuters. generic drugs revenue rose 17% to $2.61 billion, lifted by mylans<u+2019>s acquisitions of swedish rival meda ab and the generic and specialty topicals business of renaissance acquisition holdings. meanwhile, sales in its smaller specialty business fell 4.4% to $418.7 million, on lower epipen volumes. mylan backed its recently revised guidance for adjusted earnings this year of between $4.70 and $4.90 a share, due to its responses to the recent controversy over the high price of the company<u+2019>s lifesaving epipen treatments. it also said it couldn<u+2019>t give full-year guidance for 2016 given uncertainty over items such as litigation settlements and the expenses related to its purchase of meda for $7.2 billion. write to anne steele at anne.steele@wsj.com and jonathan d. rockoff at jonathan.rockoff@wsj.com
mylan posts loss, hurt by lower epipen volumes, charge related to settlement - wsj
anne steele jonathan d. rockoff