Mylan Pharmaceuticals Inc

Chain Drug Review, Sept 29, 2003

781 Chestnut Ridge Rd. Morgantown, W. Va. 26505-4310

Phone: (304) 599-2595 Fax: (304) 598-3232

Web site: mylan.com; mylanpharms.com

Key contact: Jason Harper, associate director of marketing

MORGANTOWN, W.Va. -- Mylan Pharmaceuticals Inc.'s parent company Mylan Laboratories Inc. announced financial results for the first quarter ended June 30, 2003, reporting record diluted earnings per share and record net earnings driven by strong performances by the company's generic as well as brand segments.

Net earnings for the quarter increased 36% to $83.9 million from $61.8 million in the prior-year period. Diluted earnings per share for the quarter were 46 cents compared with 32 cents for the first quarter of fiscal 2003, an increase of 44%.

The first quarter results included gains on legal settlements that amounted, net of tax, to about 8 cents per diluted share.

"We are extremely pleased with our first quarter results, which demonstrate a continuation of the consistent, strong performance of our business," remarks Robert Coury, vice chairman and chief executive officer of Mylan Laboratories.

Net earnings for the generic segment were $255.2 million in the quarter compared with $235.6 million in the first quarter of fiscal 2003, an increase of $19.6 million, or 8%.

The brand segment reported a strong quarter, with net revenues of $76.2 million compared with $39.8 million in the prior-year period, an increase of $36.4 million, or 91%.

The brand segment was successful in sustaining a market share of about 40% for Amnesteem, a product launched in late fiscal 2003, despite the entrance of additional competition in the market.

During the first quarter of fiscal 2004 Amnesteem contributed net revenues of $28.1 million. The first quarter results include gains of $21.7 mill ion related to certain previously announced settlements.

In April 2003 the company was paid $12.5 million pursuant to a settlement of claims associated with contracts for the marketing and manufacturing of Zagam.

The remainder of the gain relates to future payments to the company totaling $10 million from Mylan's codefendants in lorazepam and clorazepate litigation.

These payments represent a partial reimbursement of the settlement funds paid by Mylan toward the settlement announced in 2003. These additional payments were agreed to by the codefendants in 2004.

The new generic drugs Mylan Pharmaceuticals has been given FDA approval for include tamoxifen, tizanidine, mirtazapine, omeprazole RD (10 mg and 20 mg), ketoprofen ER (200 mg), midodrine and nefazodone.

In addition, the company has received tentative FDA approval for omeprazone DR (40 mg), zolpidem tartrate and topiramate.

Mylan Laboratories has also announced that the board of directors has approved a three-for-two stock split of the company's common shares.

The split will be effected by issuing one additional share of common stock for every two shares of common stock held.

"This is the eleventh stock split in Mylan's history," noted Coury. "Our decision further demonstrates the board of directors' and management's confidence in the strong fundamentals of our business and the long-term opportunities that lie ahead."