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Mylan (MYL) PT Lifted To $26 By RBC Capital On Positive Developments, 'Outperform' Maintained

 May 16, 2012 04:29 PM

RBC Capital Markets analyst Shibani Malhotra increased her price target on shares of Mylan Inc. (NASDAQ:MYL) to $26 from $25 on recent positive developments, while maintaining "Outperform" rating.

The brokerage raised its Q3-2012 EPS estimate to $0.74 from $0.70, its Q4-2012 forecast to $0.71 from $0.68, its 2012 estimate to $2.50 from $2.43 and its 2013 forecast to $2.74 from $2.70.

Malhotra has increased 2012 EPS estimate for Mylan following the company's May 10 announcement increasing its 2012 EPS guidance to $2.45-$2.55 from previous forecast of $2.30-$2.50. Mylan also announced a $500 million share repurchase authorization.

[Related -Mylan, Inc. (MYL) Q3 Earnings Preview: Weak Dollar = Strong Profit?]

Contribution from generic Doryx 150mg (launched April 30). The analyst's previous estimate included a risk adjusted Doryx contribution in the second half of 2012; with the product now launched she has added it to her 2Q-2012 estimate and increased its contribution in the second half of 2012.

Risk adjusted generic Provigil launch in 3Q-2012. Mylan has challenged the FDA's decision to grant Teva FTF status, which was a reversal of the agency's initial determination that FTF status was shared among a number generic players including Mylan.

Teva's 180 day exclusivity expires one month into 4Q-2012, however if Mylan prevails the company will be able to enter the market earlier. To account for this Malhotra has added a risk adjusted contribution from generic Provigil (about $30 million) to her 3Q-2012 EPS estimate.

[Related -Mylan Inc (MYL): Patent Cliff Set To Fuel 200% Gain]

Given the continued strength of the franchise, Malhotra has slightly increased our sales estimate for the EpiPen product. She has reduced the minor impact from share repurchase to the bottom end of Mylan's 430-440 million share guidance to account for the company's new $500 million share repurchases authorization.

Malhotra continues to view Mylan as one of the best positioned generic companies on a fundamental basis given its broad global portfolio, low cost manufacturing and focus on quality and reliability. Her increased estimates drive price target up $1 to $26.

Mylan is a pharmaceutical company, which develops, licenses, manufactures, markets and distributes generic, branded generic and specialty pharmaceuticals. The company operates a specialty business, which is focused on respiratory, allergy and psychiatric therapies.

MYL closed Wednesday's regular session up 0.28% at $21.28.



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