Mylan Laboratories "under perform"

08/18/04 - CE Unterberg Towbin

NEW YORK, August 18 (New Ratings) – Analyst Angela Larson of CE Unterberg Towbin issues an "under perform" rating on Mylan Laboratories (MYL).

Shares of Mylan Laboratories, a US-based pharmaceutical company, are currently trading at $15.36.

According to CE Unterberg Towbin's research note published this morning, the company’s plans to launch a generic version of Johnson & Johnson's Duragesic drug has been impeded by a federal court ruling. The analyst mentions that the US District Court of Columbia has ruled in favour of the FDA, upholding the pediatric patent extension for Duragesic. The FDA had decided to withdraw its final marketing approval for Mylan Laboratories' generic drug in July this year, CE Unterberg Towbin says.

The analyst says that a delay in the product launch was largely anticipated and is already factored into the estimates for Mylan Laboratories and its share price. CE Unterberg Towbin expresses its concern regarding the limited visibility into Mylan Laboratories' generic drug portfolio and the growth catalysts for the overall generic drug industry in the near term. The current valuation of the company's stock is unattractive, the analyst believes.

The EPS estimates FY04 and FY05 are $1.05 and $1.08, respectively. The P/E estimates for 2004 and 2005 are 14.6x and 13.3x, respectively.

CE Unterberg Towbin issues an "under perform" rating on Mylan Laboratories.