Generic drug maker Mylan ($MYL) turned itself into one of the largest makers of sterile injectable drugs last year with its $1.75 billion acquisition of Agila Specialties. Today the drugmaker pointed to one reason to take on all of that production capacity. Its earnings got a big boost from injectable products, in part because of drug shortages.
The Pittsburgh, PA-based company today said that because the Agila deal closed Dec. 4, it did not contribute to the company's 11% rise in fourth-quarter earnings. But it said a 13% jump in its specialty drug unit did play a big part. And it called out sales of its EpiPen, the leading epinephrine autoinjector, as a big reason. Epinephrine pens have been in short supply because of manufacturing issues at Hospira ($HSP) and American Reagent, according to the American Society of Health System Pharmacists, creating big demand for Mylan's product. The FDA updated its shortage list this week to indicate that Hospira began shipping the product this month.
Sterile injectable drugs have seen big growth, and even more is anticipated. Manufacturing problems with some of the big players have also created shortages and so opened up big opportunities with the approved plants that make them. Mylan bought the sterile injectable unit of India's Strides Arcolabs and in one fell swoop picked up 9 manufacturing facilities, including plants in Brazil and Poland. Eight of the 9 plants are FDA-approved. It has one of the largest sterile capacities in India and one of the largest freeze-drying capacities in the world. Mylan already had a sterile manufacturing plant in India, as well as one in Ireland.
But the deal has not been without its difficulties. Shortly before the deal closed, the FDA cited one of Agila's Indian facilities in a warning letter. And this month Mylan had to recall 10 lots of the injectable "hypnotic drug" etomidate made at the Agila plant in Poland for Pfizer ($PFE) after packaging labels got shredded in the manufacturing process and pieces of them got into vials.