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Paulson & Co. adds to its position in Mylan

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Paulson and Mylan

Paulson & Co. created a larger position in Mylan (MYL) in the fourth quarter that ended in December. The position accounted for 4.35% of the funds’s portfolio. The filing revealed that the fund added 2,453,700 shares to its Mylan holding in the fourth quarter.

Mylan makes up 3.3% of the iShares NASDAQ Biotechnology ETF (IBB). Shire (SHPG) makes up 1.97% of IBB, while Salix Pharmaceuticals (SLXP) makes up 1.57% of IBB. Both companies are also part of Paulson’s 4Q14 portfolio.

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Overview of Mylan

Mylan is a leading global pharmaceutical company that develops, licenses, manufactures, markets and distributes generic, branded generic, and specialty pharmaceuticals. It has two segments:

  • Generics – This business primarily develops, manufactures, sells, and distributes generic or branded generic pharmaceutical products in tablet, capsule, injectable, or transdermal patch form, as well as active pharmaceutical ingredients. Starting in 2014, the regions within the Generics segment were revised to North America, Europe, and Rest of World. The Rest of World region includes the former Asia-Pacific region, Brazil, and export sales to emerging markets, which were previously included in the North America and EMEA regions, respectively.
  • Specialty – This business engages mainly in the development and sale of branded specialty injectable and nebulized products.

Mylan to acquire Abbott’s branded specialty and generics business

In July, Mylan said it would acquire Abbott Laboratories’ (ABT) non-US developed markets specialty and branded generics business. A release notes that upon closing, Abbott will receive 105 million shares of the combined company, worth approximately $5.3 billion based on Mylan’s closing price of $50.20 on July 11, 2014. This represents an approximately 21% ownership stake. The new company will be incorporated in the Netherlands, reducing Mylan’s tax rate.

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A statement also said that the transaction “further diversifies Mylan’s business outside of the US by adding a differentiated and attractive portfolio of durable specialty and branded generic products and providing entry into the over-the-counter market.” Key products include Creon, Influvac, Brufen, Amitiza, and Androgel, among others. It will also help Mylan to “accelerate its previously stated financial targets for 2018, including at least $6.00 in adjusted diluted EPS.”

Mylan posts 18% revenue growth

Mylan’s third-quarter results saw the company posting 18% growth in total revenues to $2.08 billion. It posted adjusted diluted earnings per share, or EPS, of $1.16, up 41% and GAAP (generally accepted accounting principles) diluted EPS of $1.26, up 215% year-over-year. A release says it saw double-digit revenue growth in North America, Rest of World, and its Specialty segment, as it “continued to execute against its growth drivers, with strong contributions from injectables and anti-retroviral franchises, as well as from EpiPen Auto-Injector.”

The next part of our series will review the fund’s stake update in Time Warner Cable.

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