(Reuters) – Drugmaker Mylan NV on Tuesday reported lower-than-expected quarterly revenue and failed to provide greater clarity on a potential revamp of the company’s strategy, sending its shares down 17 percent to a more than six-and-a-half year low.
Mylan CEO Heather Bresch attends a conference at the Cannes Lions International Festival of Creativity, in Cannes, France, June 19, 2018. REUTERS/Eric Gaillard
The company in August announced that its board had launched a strategic review, citing tough pricing environment for generics and said last quarter that the review was nearing completion.
But on a conference call with analysts on Tuesday Chief Executive Officer Heather Bresch declined to say when Mylan would announce its review results, saying it would be in the “near-term.”
SVB Leerink analyst Ami Fadia said the delay raises questions about what the board may be considering as part of the review. “Visibility into any strategic changes could be critical in how investors view the stock.”
Mylan has been grappling with lower drug prices as well as problems at its Morgantown facility in West Virginia after the U.S. health agency issued a warning letter last year.
Mylan, which also reaffirmed its 2019 forecasts, said its quarterly revenue was hit by lower volumes and a stronger dollar.
“We believe investors had braced themselves for a bottom line miss, but not the revenue weakness,” Mizuho Securities analyst Irina Koffler said in a note titled ‘bottom line beat irrelevant’.
Drugmakers such as Mylan and Teva Pharmaceutical Industries Ltd have suffered over the past few years as a steep fall in generic prices ate into their profits, but they have lately seen prices stabilizing.
Mylan said it does not expect price erosion in the generics market in the United States to accelerate in 2019.
Revenue from its North America business, its biggest, fell 6 percent to $922.9 million and missed estimates of $952.43 million, while sales at its Europe business dropped 14 percent to $895.3 million, below $1.06 billion that analysts expected.
Total revenue fell 7 percent to $2.50 billion and missed estimates of $2.69 billion, according to IBES data from Refinitiv.
The company reported a net loss of $25 million, or 5 cents per share, in the first quarter ended March 31, compared with profit of $87.1 million, or 17 cents per share, a year earlier.
Excluding items, the company earned 82 cents per share and beat expectations of 79 cents per share.
Shares of the company fell to $23.84 in afternoon trade on Tuesday. Since Bresch took the helm in 2012, Mylan shares have risen nearly 8 percent.
Reporting by Saumya Sibi Joseph, Aakash Jagadeesh Babu in Bengaluru and Michael Erman in New York; Editing by Arun Koyyur