Mylan Settles Dispute with Pfizer

Recently, Mylan (MYL - Analyst Report) announced the settlement of its dispute with Pfizer (PFE - Analyst Report) related to the patent of antifungal drug Vfend (voriconazole). Now Mylan can launch an authorized generic version of the drug in two dosage forms of 50 mg and 200 mg tablets in early 2011.

Mylan’s subsidiary, Matrix Laboratories, has Food and Drug Administration (FDA) approval for the generic version of the drug. Being the first company to submit an Abbreviated New Drug Application (ANDA), Matrix expects to be eligible to receive 180 days of marketing exclusivity for the drug.

However, the agreement does not include liquid or intravenous versions of Vfend. The agreement has yet to be approved by the US Department of Justice and the Federal Trade Commission. Vfend recorded sales of $164 million in the 12 months ended June 30.

Mylan received quite a few approvals in the past few weeks. In September, the company received an FDA approval for its generic version of Bristol-Myers Squibb's (BMY - Analyst Report) Sinemet for the treatment of Parkinson’s.

In addition, Matrix received a tentative FDA approval under the President's Emergency Plan for AIDS Relief (PEPFAR) for its New Drug Application (NDA) for a fixed-dose combination of Efavirenz, Lamivudine and Tenofovir Disoproxil Fumarate tablets. Although Matrix will not be able to market the product in the US due to existing patents, the drug can be sold in many developing countries.

Currently, Mylan has 121 ANDAs pending FDA approval representing $85.7 billion in annual brand sales, according to IMS Health. Among these, 35 are potential first-to-file opportunities, representing $17.9 billion in annual brand sales.

Mylan is now the third-largest generic company in the world after the acquisition of Merck Generics and Matrix Labs. We expect the Merck Generics acquisition to contribute significantly to the company’s long-term growth and help it expand its footprint in non-US markets.

We believe with the recent product approvals, Mylan will be able to maintain its top-line growth. In fact, after posting strong second quarter results, the company raised its full-year revenues and earnings guidance. We have a Neutral recommendation on the stock.

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