After Mylan NV’s price hikes on its EpiPen allergic reaction treatment ignited patient anger and public blowback last year, critics and lawmakers questioned why the dated product didn’t have more rivals.
Following the scandal, and under new leadership, the Food and Drug Administration announced a plan to facilitate prescription drug competition, especially for branded drugs that had no generics, or limited ones, available.
Drugmakers have cited exactly that FDA shift in explaining why their generics businesses have been hurting, an industry trend that slammed generic drugmakers’ and drug distributors’ shares late last week.
says that it’s suffering too—and claims that the FDA’s new policy is hitting them twice as hard.
Accelerated competition is harming the company’s base business, executives said on Wednesday, but the FDA also isn’t moving fast enough to approve Mylan’s generics for asthma medication Advair and multiple sclerosis drug Copaxone.
Out of an “abundance of caution,” Mylan thus pushed all major U.S. product launches, including generic Advair and Copaxone, from its 2017 financial guidance and into its 2018 guidance. Mylan shares, which plummeted as much as 9% in premarket trade, declined 2.4% in extremely heavy midday trade Wednesday.
The company now expects 2017 revenue of $11.5 billion to $12.5 billion, compared with the FactSet consensus of $12.4 billion, and 2017 adjusted earnings-per-share of $4.30 to $4.70, below the FactSet consensus of $5.13.
The midpoint of revenue guidance was lowered by about $1 billion, an estimated $575 million of which was attributed to new launches, said EvercoreISI analyst Umer Raffat. The difference can likely be attributed to generic price erosion and competition, among other factors, he said.
The FDA failed to approve Mylan’s generic Advair in late March. After a recent meeting with the regulator, Mylan said that it does not need to conduct more studies on the drug.
The company plans to submit its response to the FDA in the next couple of weeks, according to President Rajiv Malik.
And, for generic Copaxone, the company still has a target action date of mid-September, Malik said.
Even so, “given the unpredictability of timing and an abundance of caution,” the company decided to defer launch expectations to its 2018 guidance, Malik said.
The possibility of a delayed generic Copaxone launch temporarily buoyed Teva Pharmaceutical Industries Ltd.
shares premarket Wednesday, before Teva shares fell yet again in midday trade. The blockbuster drug is a key product for Teva, and the sooner it faces generic competition the more hard-hit Teva will be, according to Wall Street analysts.
Ironically, one of the products affected by the FDA’s accelerated generic approvals was Mylan’s EpiPen.
See more: Mylan’s EpiPen sales have taken a hit
The company maintains a 70% share of the market, including the EpiPen and the EpiPen authorized generic, Mylan executives said on its earnings call, but the EpiPen is going to be less than 5% of the company’s profit moving forward.
Mylan shares have dropped 18.1% over the last three months, compared with a 3.1% rise in the S&P 500
The VanEck Vectors Generic Drugs ETF
fell 1.2% in midday trade Wednesday, and has fallen 8% in the month-to-date.