Mylan announces quarterly loss due to Morgantown restructuring

13-May-2019 - Last updated on 13-May-2019 at 16:07 GMT

(Image: Getty/zoom-zoom)

Troubleshooting in Mylan’s Morgantown facility, after a US FDA warning, has hurt the company’s first quarter results.

Mylan reported a net loss of $25m (€22.2m) compared to last year’s profit of $87.1m.

According to the company’s CEO, Heather Bresch, “The large swing is due to the timing of key product launches, working capital investments [...] as well as continued positive progress on the Morgantown remediation.”

In November 2018, the US Food and Drug Administration (FDA) issued the company a warning letter following a Form 483 with thirteen observations due to a “lack of appropriate oversight” by Mylan’s Quality Unit at its facility in Morgantown, West Virginia.

The company then published a statement answering the FDA, noting it will proceed in ‘comprehensive restructuring and remediation’ of the facility. At the same time, Mylan’s management informed investors that the restructure will force a decreased production in the facility.

Bresch said that the Morgantown remediation program cost the company approximately $70m. However, she pointed out the company’s top line results fell “slightly softer against our own expectation”, announcing $2.5bn in revenue versus $2.7bn consensus.

Answering investors during 2019 first-quarter earnings’ announcement, Mylan’s CFO, Ken Parks, confirmed the company carried out a number of discontinuations throughout 2018 in order to ‘prune’ its portfolio and commented that this “certainly has played a big role in how much we've seen year-over-year volume declination.”