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Mylan Laboratories Inc. (MYL)

Mylan Laboratories Inc. (MYL). Solomon Lee, Analyst Graduation Date: April 2008. Background Information. Generic Drug Manufacturer Mylan Pharmaceuticals: Solid oral-dosage and time-release products Mylan Technologies: Industry leader in transdermal research

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Mylan Laboratories Inc. (MYL)

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  1. Mylan Laboratories Inc.(MYL) Solomon Lee, Analyst Graduation Date: April 2008

  2. Background Information Generic Drug Manufacturer Mylan Pharmaceuticals: Solid oral-dosage and time-release products Mylan Technologies: Industry leader in transdermal research UDL Laboratories: Number one supplier of unit-dose medication to hospitals and other institutions Key Facts 1) Distributes products mainly in U.S 3) Third largest generic drug maker 2) $100 million upgrade on primary 4) Operations in Pennslyvania, West research and development facility Virginia, Vermont, Illinois Major Product Lines Calcium Channel Blockers 17% of revenue in 2006 (Nifedpine) Narcotic agonist analgesics 15% of revenue in 2006 (Fentanyl) Distributes and markets approximately 160 generic drugs

  3. Positive Factors • Pioneer in Transdermal Products • The first generic class 2 narcotic transdermal product approved by the FDA (fentanyl) • No rival generic transdermal products has yet to emerge • Strategic Expansionary Initiatives • Somerset Pharmaceuticals, Bertek Inc., Penederm Inc., UDL Laboratories, King Pharmaceuticals • Acquisition of Matrix Laboratories Ltd. in India gives greater exposure to cheap labor and lucrative Asia and European markets • Steady Acquisition of ANDAs • As of March 31, 2006, Mylan had 56 ANDAs and 5 supplemental ANDAs for new product strengths pending FDA approval. 17 have been granted tentative approval/approvable status.

  4. Negative Factors • Company Differentiation • In the generic drug industry, limited barriers to entry exist • Prices are market driven and market determined and can eat into profits • Litigation Uncertainty • Mylan is currently involved in several legal proceedings that can have substantial effects on profitability • The outcome of the proceedings is relatively uncertain • Lack of Proprietary Patents • Mylan has limited prominent proprietary or NDA approvals. Mylan’s focus is primarily on distributing generics products • Strong dependency on expirations of patented drugs

  5. Industry Tool Analysis

  6. Summary • Mylan is a prominent generic drug manufacturer • Mylan has taken steps to expand geographically and into new markets • Lack of proprietary advantages is compensated for higher margins and profitability • Many inherent risk exist being in the generic drug industry that could affect profitability • Mylan competes well against other companies in its industry

  7. Recommendation Mylan Laboratories should be added to the watch list

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