Shares of Mylan N.V. (NASDAQ: MYL) surged over 16% in premarket trading after the U.S. Food and Drug Administration approved the company’s generic version of Teva’s multiple sclerosis drug, Copaxone. Due to the rising cost of pharmaceuticals, more generic versions of complex drugs have been introduced into the market.
Both doses of Mylan’s version of Copaxone generated global sales of $1.02 billion in the second quarter of this year which should push 2017 and 2018 earnings per share higher. This new drug would add 13 cents per share to the company’s earnings per quarter if the FDA grants them a 180-day exclusivity period post approval since the company missed out on approval for the drug twice this year. Mylan lowered their earnings forecast in August due to a delay in launching new drugs.
Teva’s U.S. listed shares dropped 13.7% after Mylan became the top gainer on the S&P 500 before the opening bell. Mylan’s market share is expected to reach as high as 40% with Wells Fargo predicting sales at about $172 million per quarter that will result in Teva’s full year earnings to drop $3 per share by next year.