EX-99.1 2 d265624dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

U.S. EpiPen Profitability Analysis

 

 

Following Mylan’s recent testimony before the United States House of Representatives regarding EpiPen, Mylan is providing this analysis of the profitability in the United States of EpiPen as a supplement to its testimony. Mylan does not regularly provide profitability analyses for individual products and does not intend in the future to provide product level profitabilty analysis for EpiPen or to update this analysis.

 

  (In USD millions)

  2008         2009         2010         2011         2012         2013         2014         2015         2016E [3]    

Sales

    184        200        281        371        622        742        933        912        1,100   

Cost of Goods Sold

    79        86        123        139        195        202        224        255        275   

Gross Profit

    105        114        158        232        427        540        709        657        825   

Gross Margin

    57.1%        57.0%        56.2%        62.5%        68.6%        72.8%        76.0%        72.0%        75.0%   
                 

Operating Costs [1]

    34        32        43        58        121        147        184        159        154   
                 

Operating Profit

    71        82        115        174        306        393        525        498        671   
                 

Estimated Implied Interest [2]

    67        66        65        62        56        42        24        -        -   
                 

Estimated Tax Impact

    2        6        19        42        94        132        188        187        252   

Tax Rate [4]

    37.5%        37.5%        37.5%        37.5%        37.5%        37.5%        37.5%        37.5%        37.5%   
                 

Net Product Profitability

    3        10        31        70        156        219        313        312        419   
                 
                 

US Pens Sold (millions)

    4.3        4.5        5.2        5.5        7.3        7.4        7.9        8.3        8.0   
   

Approximate US Metrics per Pen (in dollars):

                   

Sales

    43        44        54        67        85        100        118        110        137   

Cost of Goods Sold

    18        19        24        25        27        27        28        31        34   

Gross Profit

    24        25        30        42        58        73        90        79        103   

Operating Cost

    8        7        8        11        17        20        23        19        19   

Operating Profit

    17        18        22        32        42        53        66        60        83   

Net Product Profitability

 

   

 

1

 

  

 

   

 

2

 

  

 

   

 

6

 

  

 

   

 

13

 

  

 

   

 

21

 

  

 

   

 

30

 

  

 

   

 

40

 

  

 

   

 

38

 

  

 

   

 

52

 

  

 

 

[1] Includes direct selling, marketing, medical affairs and R&D expenses. Does not include corporate allocations or the cost of the EpiPen4Schools program.
[2] Assumes interest on the unrecovered original investment at the actual weighted average borrowing rate of 7.9% for the debt incurred with the acquisition. Approximately $850M of the acquisition price attributed to EpiPen.
[3] Before changes to patient access programs and the launch of the authorized generic.
[4] The statutory tax rate for the U.S. has been used in this product line profitability analysis.

 

 

This analysis is derived in part from data prepared in accordance with generally accepted accounting principles (“GAAP”), and a reconciliation of the EpiPen operating profit to the segment profitability of Mylan’s Specialty Segment is included below. As used in this analysis, however, net product profitability for the EpiPen product and net product profitability per EpiPen unit sold are not GAAP measures and also reflect adjustments for estimated implied interest expense and for the impact of estimated taxes that have not been determined in accordance with GAAP and are not directly derived from Mylan’s reported results. Mylan does not have 2016 GAAP guidance, and consequently cannot provide a reconciliation for 2016E to Specialty Segment profitability or Consolidated results without unreasonable effort, because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for the reconciliation. These items include, but are not limited to, acquisition-related expenses including those related to the recently closed Meda transaction, restructuring expenses, asset impairments, litigation settlements, changes to contingent consideration and certain other gains or losses. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period.

 

        2008             2009             2010             2011             2012             2013             2014             2015      

EpiPen operating profit

    71        82        115        174        306        393        525        498   

Other Specialty Segment profitability

    (34     (12     8        66        13        69        140        173   

Specialty Segment profitability

    37        70        123        240        319        462        665        671