May 9, 2018 / 12:00 PM / 5 months ago

UPDATE 3-FDA says Mylan's EpiPen is in shortage in U.S.

(Adds background, quote from professor and analyst, updates stock price)

By Michael Erman

May 9 (Reuters) - U.S. regulators said on Wednesday that Mylan NV's EpiPen products are in shortage due to manufacturing delays that are creating intermittent supply constraints of the emergency allergy treatment.

The drugmaker also reported weaker-than-expected first-quarter revenue as sales of the allergy shot declined and the company faced intensifying competition in North America.

Still, the company said it remained on track to launch several important products this year. Its shares rose 5 percent in afternoon trading, after falling 7.5 percent since May 1.

Mylan warned U.S. customers on Tuesday that they may have trouble getting EpiPen prescriptions filled due to problems at a factory.

On Wednesday morning, the U.S. Food and Drug Administration added EpiPen, a lower-dose version called EpiPen Jr, and Mylan's own generic versions of those products to its list of drugs in shortage. It said they were currently available, but that "supply levels may vary across wholesalers and pharmacies."

Mylan, which had declined to comment for nearly a month about possible U.S. EpiPen shortages, on Tuesday said it notified the FDA a few months ago of supply issues due to delays at manufacturing partner Pfizer Inc.

This was Mylan's first acknowledgment of possible U.S. supply issues following reports of EpiPen shortages in Canada and Britain last month.

Erin Fox, senior director of drug information at University of Utah Health, said the FDA is in a tough spot because it relies on drug companies to provide information about shortages.

"If the intent of that notification is that the FDA can work on prevention and mitigation strategies before a shortage even happens, the FDA needs to know all the details," Fox said. "The FDA is not getting that from the pharma companies."

Mylan said it is receiving "continual" supply from Pfizer unit Meridian Medical Technologies, which produces all EpiPens sold globally at a single plant near St. Louis.

Meridian Medical has been hit by a series of manufacturing problems. In March 2017, Mylan recalled tens of thousands of devices after complaints that some had failed to activate and in September it received a warning letter from the FDA.

EpiPen autoinjectors deliver a dose of epinephrine in the event of severe allergic reaction, such as to bee stings or exposure to peanuts.

EARNINGS IN LINE, BUT SALES DIP

Mylan said its net income rose 31 percent to $87.1 million, or 17 cents per share, in the first quarter.

Excluding onetime items, Mylan earned 96 cents per share, matching analysts' expectations.

The drugmaker told investors it was still on track for product launches this year including the generic version of asthma drug Advair.

The company's revenue fell 1.3 percent to $2.68 billion in the three months ended March 31, missing analysts' average expectation of $2.75 billion, according to Thomson Reuters I/B/E/S.

North America sales of Mylan's branded products, including EpiPen, fell $108.7 million. Mylan's revenue from EpiPen dropped sharply over the last year due to increased competition, the launch of its own cheaper generic and higher rebates that it has had to pay to as a result of a settlement for overcharging the U.S. government.

The shortages are "definitely something we're concerned about, but as of now it doesn't seem material," said Gabelli Funds portfolio manager Jeff Jonas.

He said the impact would have been more severe a year or two ago when Mylan was charging more for the devices.

Shares of Mylan rose $1.46 to $36.83 in early afternoon trading on the New York Stock Exchange. (Additional reporting by Tamara Mathias in Bengaluru; editing by David Gregorio Jonathan Oatis)

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