How Mylan Plans to Leverage Its Meda Acquisition



Leveraging the Meda acquisition

Since Meda derives about half of its total revenue from the respiratory and allergy, dermatology, and pain segments, the combined Mylan–Meda entity is expected to have an enhanced presence in these segments.

Mylan (MYL) also believes that after the acquisition of Meda, the combined company will have six franchises worth $1 billion. These franchises will involve infectious diseases, gastrointestinal diseases, cardiovascular diseases, respiratory and allergy-related ailments, metabolic and diabetes-related conditions, and diseases related to the central nervous system.How Mylan Plans to Leverage Its Meda Acquisition

The above diagram shows that the acquisition will also help to strengthen Mylan’s position in areas such as pain, anesthesia, women’s health, and dermatology.

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Respiratory and allergy segment

Post-completion of the Meda deal, Mylan expects to leverage the commercial capabilities and scale of the combined entity to better position existing products such as EpiPen and Dymista across multiple geographies.

On February 19, 2016, the U.S. Food and Drug Administration (or FDA) approved Mylan’s abbreviated new drug application (or ANDA) filing for a generic version of GlaxoSmithKline’s (GSK) respiratory drug Advair for review. Mylan expects to launch its generic Advair in the US market in 2017 if granted a positive response from the FDA, whose decision will be announced by the Generic Drug User Fee Act date of March 28, 2017.

Additionally, Mylan is involved in a Phase 3 program in partnership with Theravance BioPharma. Both companies are testing the use of revefenacin, an innovative drug for patients suffering from chronic obstructive pulmonary disease.

Mylan expects that the addition of Meda’s commercial infrastructure will enable the combined entity to successfully launch respiratory drugs such as generic Advair and revefenacin. To know more about ANDA filings, please refer to Regulations Are Instrumental in the Marketing Authorization Process.

The future success of Mylan’s respiratory franchise may be reflected in the company’s share price, as well as the price of the PowerShares Dynamic Pharmaceuticals ETF (PJP). Mylan accounts for around 4% of PJP’s total holdings.

Other franchises

Mylan also expects to expand in the dermatology segment with the addition of Meda’s branded portfolio, which also involves leading dermatological therapy Elidel. Meda’s market position is also expected to strengthen Mylan’s market position in the pain segment, which has already been strong following Mylan’s acquisition of Abbott Laboratories’ generics business.

Mylan expects that the acquisition of Meda will enable it to compete fiercely with peers such as Teva Pharmaceuticals (TEVA), Perrigo (PRGO), and Pfizer (PFE).

In the next article, we’ll explore the various factors that are expected to drive Mylan’s net profit margins in 2016.


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