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
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| 1
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| 2
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| 6
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| 13
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| 21
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| 30
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| 40
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| 38
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| 52
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[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 |