Pharmacy News Article

Oct. 30Two years after Mylan Inc. completed a $6.8 billion deal for Merck KGaA's worldwide generic drug business, CEO Robert J. Coury is looking for deals to acquire makers of brand-name drugs.

It isn't the first time. In 2005, Coury was prevented from completing a $4 billion deal to purchase brand-name drug manufacturer King Pharmaceuticals Inc. by Mylan's then-largest shareholder, billionaire investor Carl Icahn.

But the need is growing for an additional brand-name drug business to complement Mylan's small, but profitable Dey LP subsidiary, which develops, manufactures and markets airway and allergy medications. On Thursday, Coury admitted he is looking, when asked by financial analysts during a conference call on Mylan's financial results and in a phone interview.

During the past 24 months, Mylan has been busy digesting its acquisition of Merck KGaA and pharmaceutical ingredient maker Matrix, a process Coury yesterday compared to a "huge splash going straight into the air."

"For the last six months ... there's been a settling of the water," Coury said. "Like Cowen & Co. analyst Ken Cacciatore said during the conference call, moving more into brand names is the next place to go."

Coury said he wasn't contemplating a large acquisition such as the King deal, but he's looking at brand-name products or portfolios of products.

"Mylan a few years ago had a brand name product to sell, but had no infrastructure to support it," said Tim Chiang, an analyst who follows the company for FTN Equity Capital Markets Corp. in New York. "Every major generic company would love to diversify into producing brand-name pharmaceuticals, because the generic business historically has been a bumpy business."

Yesterday, Mylan reported a third-quarter loss of $4.4 million, or 13 cents per share. The Cecil, Washington County-based company's results compared to profit of $206.8 million, or 45 cents per share in the same quarter one year ago.

Revenue for the three-month period fell more than 24 percent, to $1.3 billion from $1.7 billion one year ago.

The company said that excluding revenue of $455 million in 2008's third quarter from the sale of product rights to blood-pressure medication Bystolic, revenues for the current quarter rose more than $62.2 million year-over-year.

Mylan's stocks rose yesterday, closing at $16.50, up 73 cents, or 4.6 percent.

Rick Stouffer can be reached via e-mail or at 412-320-7853.

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