Mylan NV Q1 2016 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Sumant Kulkarni - BofA Merrill Lynch - Analyst : Thanks for taking my questions. First one -- actually both for Rajiv. First, could you say how much of an opportunity still exists in expanding margins within the Mylan base business, given that you've done a notable job there after you acquired Merck KGaA? And second, you called out dermatology in your remarks. What are some of the specific ways in which the Company could become a stronger player in that therapeutic area?

Question: Sumant Kulkarni - BofA Merrill Lynch - Analyst : Thanks.

Question: Jami Rubin - Goldman Sachs - Analyst : Thank you. I have two questions. Heather, for you, first, on Meda. We all did see the numbers this morning and they did look pretty weak. You did mention that they were in line with your expectations. But I guess if you can just give us a little bit of comfort that -- we saw Perrigo lower their earnings expectations in part due to Omega. Omega's business is not that much different from Meda. So why are you so confident that Meda is not -- Meda to Mylan is not Omega to Perrigo? If you can give us a little bit more color around your thoughts as to why you can turn that business around? And then, secondly, back on the US pricing dynamics, why is the environment different from you than it is for some of the niche players? Such as companies focused mostly on dermatology or narcotics? It seems that's where the pressure is coming from, but maybe you could comment on that further? Thanks.

Question: Elliot Wilbur - Raymond James - Analyst : Thanks. Good morning. Maybe just following up on your commentary around targets, Heather, and going back to full year guidance. You had talked about, I think, essentially 20% top-line growth in the entire generics segment. And then, thinking about, based on what you guys put up today and what that implies for the remaining three quarters of the year, certainly implies a pretty significant acceleration in terms of year-over-year growth -- essentially a doubling of the rate in the first quarter. I guess one of the key dynamics there, or the largest factor in terms of bridging revenue growth, was new product launches. Maybe you could just talk a little bit about kind of where you are versus original expectations on the new product cycle at the beginning of the year? And just remind us, the balance of the year, what are some of the key known new product drivers? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 03, 2016 / 2:00PM, VTRS.OQ - Q1 2016 Mylan NV Earnings Call

Question: Elliot Wilbur - Raymond James - Analyst : Can I ask a second question as well, Heather, just real quickly? Earlier in the year you had talked about potential competition to EpiPen in the form of a BX-rated product. I don't know if you had something specific in mind, or if that was just general conservatism -- but if there's anything new there in terms of your line of sight and potential competitive assets to EpiPen?

Question: Dana Flanders - JPMorgan - Analyst : Hello. Thanks. This is Dana Flanders on for Chris. Can you just comment on the Treasury regulations that came out last month? And how you see the proposals impacting the industry and Mylan more specifically as it relates to M&A? And then, is there any impact to Mylan's longer term tax rate with some of the proposed rules around earnings stripping? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 03, 2016 / 2:00PM, VTRS.OQ - Q1 2016 Mylan NV Earnings Call

Question: Randall Stanicky - RBC Capital Markets - Analyst : Great. Thanks. Heather, just a bigger picture question for you. The US generics sector remains fragmented. Obviously, you are one of the market leaders. As we see approvals come through over the next couple of years, I guess a question: understanding that you are positioned differently and you guys see a stable outlook for profitability, do you think that the sector profitability could come under pressure? And then, two, do you think that's going to drive consolidation amongst some of the middle-tier players? And do you guys plan to continue to participate in that consolidation? Thanks.

Question: Ronny Gal - Sanford C. Bernstein & Company - Analyst : Good morning, and thank you for taking my question. Two of them. First for Tony. Tony, when I look at your progress through the year on the public domain, I see [Novidial], Kaletra, Benicar, Benicar HCT, Copaxone, and [Astrix] as potential launches during the year of material size. Any one else you'd like to highlight, just so we have the right launches in place? And second, for Rajiv -- Rajiv, I think Biocon mentioned on their call they're going to file insulin glargine soon as part of your partnership. Can you just confirm for us you have both the vial and the pen as product? Obviously there's a different IP situation on both, so it's kind of important to tell if you've got both.

Question: Ronny Gal - Sanford C. Bernstein & Company - Analyst : Any other ones you care to highlight as important launches?

Question: Umer Raffat - Evercore ISI - Analyst : Thank you for taking my question. Maybe first one for Rajiv. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 03, 2016 / 2:00PM, VTRS.OQ - Q1 2016 Mylan NV Earnings Call Rajiv on your generic Advair trial that's posted on clinicaltrials.gov. It seems like the enrollment was done only in 18-plus year old patients. Just wanted to understand -- FDA guidance seems to imply 12-plus. I wasn't sure if that was just semantics on the clin trials website, or if you have additional bridging study beyond for the 12-year-olds to 18-year-olds? Number one. And then a couple follow-ups: one was just in general on the reclassification of Brazilian operation into North America -- just want to understand that. And then also the cash flow conversion this quarter. Thank you.

Question: Douglas Tsao - Barclays Capital - Analyst : Good morning. Thanks for taking the questions. Just maybe, Rajiv, as a starting point, could you provide some perspective in terms of timing for the filings for glargine, pegfilgrastim and trastuzumab In the US in particular?

Question: Douglas Tsao - Barclays Capital - Analyst : Okay. Great. Thank you very much.

Question: Andrew Finkelstein - Susquehanna Financial Group / SIG - Analyst : Hello, thanks for taking the question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 03, 2016 / 2:00PM, VTRS.OQ - Q1 2016 Mylan NV Earnings Call Was hoping you could speak a little more specifically about the dynamics with generics in the US. As we look at the gross margin, there's obviously a lot of moving parts depending on the timing of launches. But is the price erosion you're seeing or product mix a bigger factor in the gross margin development, particularly as we look on a year on year basis? And then, as we're in this environment where the customer picture has changed, how do you feel about the visibility on results for the rest of the year, given we are seeing an increase in -- and approvals out of FDA, which could mean new competition on some of your existing products over the course of the year -- how much does that affect your planning assumptions for what the base portfolio is going to provide?

Question: Jason Gerberry - Leerink Partners - Analyst : Good morning and thanks for taking my questions. Two from me. Just first maybe for Rajiv. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 03, 2016 / 2:00PM, VTRS.OQ - Q1 2016 Mylan NV Earnings Call On Advair, do you believe that you'd be entitled to six months of regulatory exclusivity if, in fact, you get an approval on your action date, which is a little bit ahead of the competitor's action date? And then -- I apologize, but on my second question I might have missed this. But can you just explain the Rest of World generics line, the sequential weakness of about 26% Q over Q? I know the 1Q tends to be a little softer than the 4Q, but that was a bit further down than we expected for the quarter. Thanks.

Question: Ami Fadia - UBS - Analyst : This Ami Fadia on behalf of Marc. Two questions. Firstly on EpiPen, where are you on inventory levels? And did the changes impact the quarter? And secondly, could you give us some color on some of the key markets in Europe, such as France, Italy, UK, et cetera? Thank you.

Question: Tim Chiang - BTIG - Analyst : Hello, thanks. Heather, in the past you've talked about vertical integration being a very important aspect to Mylan. How does vertical integration play into this acquisition with Meda? Would you be able to bring in some of the manufacturing that Meda has in-house?