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Executive Summary

Mylan is shipping up to 3,000 bottles of Somerset's Eldepryl (selegiline) per day, Mylan Chairman and CEO Roy McKnight told the Swergold Chefitz investment firm's third annual generic drug conference in New York City Feb. 6. Noting that the Parkinson's treatment has also shown some efficacy in Alzheimer's and multiple sclerosis, McKnight said he "expects sales to climb." However, he cautioned that Eldepryl's performance would probably not reach analysts' expectations of$150-$200 mil. in annual sales in the near future. Mylan is planning to increase the size of the detail force behind Eldepryl, McKnight reported. The drug is currently promoted primarily to neurologists by 40 reps. He indicated that Mylan soon plans to detail the product to general practitioners. Assuming Eldepryl's sales will be maintained past the launch (in September), the product appears to be annualizing at $80-$90 mil. The drug's current average wholesale price (AWP) is $112.99 per bottle of 100 capsules. Based on the AWP, shipments of 3,000 bottles a day would put sales at roughly $340,000 a day, or around $2 mil. a week. Mylan acquired Somerset last year through a joint venture with Bolar, in which the two generic companies paid $35 mil. for Somerset and split ownership of the firm. McKnight indicated that Mylan has considered buying out part of Bolar's share in light of that company's difficulties under the generic drug investigation. "If the going gets real tough, we will find a way to control the situation," he said. However, McKnight added that Mylan would not be interested "in much more than 1% to 10%" of Bolar's 50% stake in the joint venture. Commenting on Mylan's marketing application for sucralfate, the generic version of Marion's anti-ulcer drug, Carafate, McKnight said his company had expected approval by the end of 1989. "If something doesn't happen," McKnight said, "you can be sure we will check it out." McKnight emphasized that the generic drug investigation is not over yet. "To those who have been lying low these many months in hope that the storm would pass, I can promise that this long and sordid story is not yet over," he said. "The investigations of the U.S. Attorney in Baltimore and Chairman Dingell's subcommittee are continuing and I predict many more shocks are in store during 1990," McKnight said. During the ongoing discovery phase of its lawsuit, filed in June 1989 against four generic firms and several former FDA chemists, Mylan "has already uncovered significantly more wrongdoing than as yet been publicly revealed," McKnight said. The suit seeks over $200 mil. in damages under federal antitrust law and accuses the defendants of racketeering ("The Pink Sheet" June 12, T&G-1). McKnight predicted that there "will be five or six more guilty pleas handed down from agency people, and that there may be one or two more industry" indictments. The Mylan exec also suggested that the generic drug industry needs a new association to handle the current industry problems. McKnight reported that Mylan resigned from the Generic Pharmaceutical Industry Association late last summer, because "we felt that they could no longer speak for us." As to the National Association of Pharmaceutical Manufacturers, McKnight said they have "their own problems," adding: "I think we need a new association and I think the association has got to have some very rigorous standards."

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