Mylan CEO Stands By Earlier FDA Inspection Statement
31 July 2009 - 12:13AM
Dow Jones News
Mylan Inc. (MYL) Chief Executive Robert Coury said that the
generic drug maker stands by its Tuesday statement that a Food and
Drug Administration inspection determined that reported quality
control issues at a West Virginia plant were unfounded.
In an terse statement at the beginning of the Pittsburgh
company's second-quarter conference call, Coury implied that
unspecified parties were attempting to use the controversy to move
the stock price and create problems with regulators.
"There are some outside the company who attempt to speak on
behalf of Mylan to the point that statements being made were
purposely being mischaracterized in an attempt to further insight
the overreaction that we witnessed earlier in the week and even to
go so far as to attempt to pit us against the regulatory agency,"
Coury said.
He said the company wouldn't answer any additional questions on
the issue, and it was unclear who the accusations were
targeting.
Mylan's stock plummeted 13% to $12.10 on Monday but then rose as
high as 10.5% on Tuesday in the wake of the company's statement
about the FDA inspection. The FDA subsequently disclosed that the
investigation into the issues is ongoing and "statements to the
contrary are untrue."
Shares were recently up 4.6% to $13.50 shortly after the market
open following a report of strong second-quarter results and
increased 2009 expectations.
About 24% of Mylan's float is sold short, meaning those
shareholders expect the stock price to decline, which can add to
price volatility.
In the call, Coury said Mylan respects the FDA's "independent
processes and appreciate their speed and diligence."
On Sunday, the Pittsburgh Post-Gazette reported that Mylan had
launched an internal probe to investigate whether workers at the
plant had been routinely overriding computer-generated warnings
about the drugs being produced at the plant. The newspaper cited an
internal report and had other experts review the report and call it
a significant problem.
Coury blasted the reporting in that article as "highly
irresponsible" and "sensational" that containing allegations that
were "false, misleading and unfounded."
He also stressed the company's 48-year reputation of
manufacturing quality, a factor that many on Wall Street have
stressed in recent days.
Analyst Corey Davis with Natixis Bleichroeder stressed that
Mylan has only one product recall since 2005, compared to 19 from
Teva Pharmaceutical Industries Ltd. (TEVA), the world's biggest
generic drug maker.
Several analysts hypothesized that the mix-up came from a
communication breakdown between the local inspector, who may have
made comments to company officials, and the official FDA assessment
of the investigation as a whole.
Coury have weight to that scenario, saying that the FDA's
inspection Monday ended with a "closeout meeting" and the agency
didn't issue a Form 483, which covers any findings in an
inspection.
"You can rest assured that the quality of our products was
never, ever compromised in any way," he said.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com