Meda Falls Most Since Rejecting Mylan on Lowered Sales ForecastKim McLaughlin
Meda AB, the Swedish drugmaker buying Rottapharm Madaus of Italy after spurning a takeover bid from Mylan Inc., fell the most in three months after cutting its sales forecast on difficulties manufacturing a skin treatment.
Meda now sees organic growth -- sales adjusted for currency effects, acquisitions and disposals -- of 2 percent to 3 percent in 2014, compared with a previous forecast of growth similar to the 4 percent achieved in 2013. Manufacturing problems in the second quarter impeded Meda’s delivery capacity for Elidel, a treatment for atopic dermatitis that it acquired from Novartis AG in 2011, the company said today in a statement.
“We are unable to say with any certainty when these problems will be resolved,” Meda said. The difficulties probably won’t last into next year, Chief Executive Officer Joerg-Thomas Dierks said on a conference call.
The shares fell as much as 10 percent, the steepest intraday decline since Meda rebuffed a takeover approach from Mylan on April 28, and were down 8.3 percent at 93.25 kronor as of 12:56 p.m. in Stockholm.
Meda twice rejected advances from Mylan this year and instead chose to buy Rottapharm for about $3.1 billion, picking the family-owned company from a list of about 10 targets. The purchase adds consumer-health products as Meda seeks to double in size. Meda, based in Stockholm suburb Solna and controlled by Sweden’s billionaire Olsson family, wants to bolster its main areas of respiratory medicines, dermatology treatments and over-the-counter products.
Johan Unnerus, an analyst at Swedbank AB, said the decline in the share price as a result of the manufacturing issues and pressure on two or three products could provide an opportunity to buy Meda stock, “given the steady progress for emerging markets and over-the-counter sales.” He predicts the stock will rise to 135 kronor, implying an increase of about 45 percent.
Meda second-quarter net income rose 27 percent to 243 million kronor, missing the average estimate of 291 million kronor of six analysts in a Bloomberg survey. Sales gained 6 percent to 3.48 billion kronor, lagging behind the average estimate of 3.53 billion kronor.