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How Mylan’s Rest of the World Segment Performed in 3Q17

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Rest of the World segment

Mylan’s (MYL) Rest of the World segment includes revenues from third-party sales of generics products and specialty segment products reported from countries including New Zealand, India, Japan, and Australia as well as emerging markets including Asia, Brazil, Africa, and the Middle East.

The above chart compares the segment revenues and segment profit from the Rest of the World region for 3Q16 and 3Q17.

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Revenues

The Rest of the World segment reported 9% growth in revenues to $743.3 million in 3Q17, compared to revenues of $682.8 million in 3Q16. The growth in revenues was driven by the inclusion of Meda AB products, increased sales of new products, and higher volumes from emerging markets—partially offset by lower sales of anti-retroviral products and active pharmaceutical ingredients.

For the nine months ending September 30, revenues from the Rest of the World segment were $2.02 billion, which means 22% growth from $1.65 billion for the same period in 2016. Also, foreign exchange had a positive impact on overall revenues.

For 2017, nearly 65% of total revenues from the Rest of the World region are expected to come from generic products while specialty products are expected to contribute ~25%, and over-the-counter products are expected to contribute ~10% of total revenues.

Segment Profitability

Segment profitability includes the gross profit from the segment, less direct research & development expenses, and direct selling, general, and administrative expenses. For 3Q17, the Rest of the World segment profitability was $133.9 million, a 16% growth as compared to segment profitability of $115.6 million during 3Q16.

Notably, the iShares US Pharmaceuticals ETF (IHE) holds 4.1% of its total investments in Mylan NV (MYL), 6.3% in Bristol-Myers Squibb (BMY), 5.8% in Eli Lilly and Co. (LLY), and 7.5% in Merck & Co. (MRK).

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