Zacks_Analysts' Blog : Mylan Acquires Two Generics - Analyst Blog

Mylan, Inc. (MYL), one of the leading generic drug makers in the world, recently announced the acquisition of two generic dermatological products from Canadian company Valeant Pharmaceuticals (VRX). Mylan acquired the authorized generic version of Valeant Pharma’s Efudex cream indicated for the treatment of multiple actinic or solar keratoses.

Second, Mylan has acquired the abbreviated new drug application (ANDA) for the generic version of Valeant Pharma’s topical acne treatment BenzaClin. Mylan had originally manufactured and marketed the generic version of BenzaClin through an agreement with Valeant.

Terms of the deal have been kept confidential. Valeant Pharma was required to divest these generic products as per the terms of its deal to acquire Dermik, the dermatology unit of Sanofi (SNY), which was completed in December of last year.

Recently, Mylan also received tentative approval to market its generic version of Pfizer, Inc.’s (PFE) blockbuster cholesterol drug Lipitor which lost exclusivity in late November 2011.

Our Recommendation

We currently have an Outperform long-term recommendation on Mylan. The shares carry a Zacks #3 Rank (short-term Hold rating).

Mylan is one of the leading players in the US generics market. The company holds immense potential as many blockbuster drugs have begun to go off-patent and many more will lose patent exclusivity in the next few years.

Moreover, we are encouraged by Mylan’s geographic reach and product depth along with a robust generic product pipeline. We believe the generic segment will post strong sales in 2012 benefiting from a slew of product launches already lined up.