Leerink Upgrades Mylan On Barrage Of Catalysts, Diversified Platforms

Mylan NV MYL’s had a rough three years, but one analyst left the pharma company's investor day with fresh optimism.

The Rating

Leerink analyst Ami Fadia upgraded Mylan from Market Perform to Outperform and maintained a $52 price target.

The Thesis

By Leerink’s assessment, Mylan is positioned to strengthen its balance sheet and deliver 4-percent top-line and low-double digit bottom-line compound annual growth through 2023.

“Mylan’s biosimilars/complex products pipeline is shaping up to be one of the strongest in the industry,” Fadia said in a Thursday note.

The company has near-term, upside-driving catalysts in upcoming approvals or launches of biosimilars of Neulasta, Humira and Herceptin; generics of Advair and Restasis; and new products revefenacin and glargine, according to Leerink. 

“We are incrementally more positive on the potential for Advair’s approval this year,” Fadia said, anticipating a fast ramp and few near-term competitors. “[...] Even if it were to be delayed by a few months, we continue to see generic Advair as a meaningful contributor for 2019.”

The candidate is forecast to contribute 35 cents to 2019 earnings per share and build on a well-diversified portfolio. With over-the-counter and branded drugs accounting for 40 percent of revenue, 60 percent of sales recorded outside the U.S. and no single product representing more than 4 percent of sales, Mylan has its bases covered, Fadia said. 

“Mylan’s diversified business model remains under-appreciated, in our view,” the analyst said, noting that it needs no gap-filling acquisitions.

Price Action

Shares popped as much as 2.1 percent on the upgrade. At the time of publication, Mylan was up 1.66 percent at $41.06. 

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