Mylan Laboratories Inc.(MYL)

Solomon Lee, AnalystGraduation Date: April 2008

Background InformationGeneric Drug Manufacturer

Mylan Pharmaceuticals: Solid oral-dosage and time-release products Mylan Technologies: Industry leader in transdermal researchUDL Laboratories: Number one supplier of unit-dose medication

to hospitals and other institutions

Key Facts1) Distributes products mainly in U.S 3) Third largest generic drug maker2) $100 million upgrade on primary 4) Operations in Pennslyvania, West research and development facility Virginia, Vermont, Illinois

Major Product LinesCalcium Channel Blockers 17% of revenue in 2006

(Nifedpine)Narcotic agonist analgesics 15% of revenue in 2006

(Fentanyl)

Distributes and markets approximately 160 generic drugs

Positive Factors

• Pioneer in Transdermal Products– The first generic class 2 narcotic transdermal

product approved by the FDA (fentanyl)– No rival generic transdermal products has yet to

emerge

• Strategic Expansionary Initiatives– Somerset Pharmaceuticals, Bertek Inc., Penederm

Inc., UDL Laboratories, King Pharmaceuticals– Acquisition of Matrix Laboratories Ltd. in India

gives greater exposure to cheap labor and lucrative Asia and European markets

• Steady Acquisition of ANDAs– As of March 31, 2006, Mylan had 56 ANDAs and 5

supplemental ANDAs for new product strengths pending FDA approval. 17 have been granted tentative approval/approvable status.

Negative Factors

• Company Differentiation– In the generic drug industry, limited barriers to

entry exist

– Prices are market driven and market determined and can eat into profits

• Litigation Uncertainty– Mylan is currently involved in several legal

proceedings that can have substantial effects on profitability

– The outcome of the proceedings is relatively uncertain

• Lack of Proprietary Patents– Mylan has limited prominent proprietary or NDA

approvals. Mylan’s focus is primarily on distributing generics products

– Strong dependency on expirations of patented drugs

Industry Tool Analysis

Summary• Mylan is a prominent generic drug

manufacturer

• Mylan has taken steps to expand geographically and into new markets

• Lack of proprietary advantages is compensated for higher margins and profitability

• Many inherent risk exist being in the generic drug industry that could affect profitability

• Mylan competes well against other companies in its industry

Recommendation

Mylan Laboratories should be added to the watch list