Mylan Inc. (MYL - Free Report) recently announced that it has inked a deal with Shionogi Inc. and Andrx to settle a patent-related dispute pertaining to the generic version of Shionogi's Fortamet. The drug is marketed as an adjunct to diet and exercise to bring down the level of glucose in the blood.
Following the agreement, Mylan can start selling its generic version of Fortamet from Aug 1, 2013, or earlier under certain circumstances. Mylan did not disclose the other terms of the deal. The transaction will be reviewed by the US Department of Justice and the Federal Trade Commission.
The resolution of the patent-related dispute regarding Fortamet has removed a significant overhang for Mylan and represents further good news for the generic unit of the company. We note that the company has received quite a few approvals on the generic front over the past few months.
Mylan’s geographic reach and product depth, along with a robust generic pipeline, are contributing to its overall growth. We are also pleased with Mylan’s focus on emerging markets. Over the long term, the biggest opportunities for growth in the generics industry would be expansion in emerging markets.
However, we remain cautious of the company’s performance in Europe, Middle East and Africa. Additionally, as most of the large branded drugs are due to lose patent exclusivity within the 2017–2018 period, we have little visibility on the growth prospects of generic companies like Mylan beyond that timeframe.
Mylan carries a Zacks Rank #2 (Buy). Companies like Lannett Company, Inc. (LCI - Free Report) , WuXi PharmaTech (Cayman) Inc. and QLT Inc. look more attractive in the pharma space with a Zacks Rank #1 (Strong Buy).