Mylan Laboratories recently purchased Merck KGaA for nearly $7 billion despite it being one-and-a-half times the size of Mylan. This will placed them in a highly competitive industry and with a great chance to grow both sales and the bottom line in the future. Stock is presently just shy of $18. with a chance to get into the mid $20’s. As with any company, the future is more important than the past and Mylan's future, even sans Merck, is solid in terms of upcoming new generic product launches. It has 62 abbreviated New Drug Applications (aNDA) pending FDA approval. More importantly, it is the first to file and could receive six months of generic drug marketing exclusivity on 14 of these aNDAs, a key factor in profitability for generic drugmakers. With the Merck KGaA generic acquisition and the majority stake in Matrix Labs, Mylan is now a vertically integrated global generics drugmaker with operations throughout the world. The generic drugmakers are rapidly consolidating and changing due to the rush to scale up and spread their fixed costs across a wider top line. Due to the increasingly litigious nature of the branded pharmaceutical companies in their war against the generics industry, this consolidation strategy makes sense if the generic drugmakers aren't paying too high a price for their acquisitions. How the industry's competitive landscape shakes out several years from now with this acquisition spree is anyone's guess. Combined with the changing political winds in the U.S., you have a sector that could be poised for top-line growth for years to come.
