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Mylan quarterly profit, 2019 forecast miss Wall Street estimates — stock tanks

Generic drugmaker Mylan on Tuesday reported lower-than-expected fourth-quarter profit and forecast 2019 earnings well below Wall Street estimates, as it grapples with significant problems at its Morgantown, West Virginia, plant.

Mylan said the lower forecast was due to higher projected sales, marketing and research and development costs, and its shares fell about 10 percent.

Mylan Chief Executive Heather Bresch also said the company was still seeing pricing erosion in the U.S. generic market, but that new product launches should offset revenue decreases for existing products in 2019.

The company formed a review committee in August to evaluate possible strategic alternatives, citing the tough U.S. environment for generic drugmakers.

Bresch said she believes the committee is nearing completion of its review, and is considering anything and everything to increase value for shareholders.

Excluding one-time items, the company said it earned $1.30 per share, missing analysts’ average expectations by 6 cents, according to IBES data from Refinitiv.

For 2019, the EpiPen maker forecast adjusted earnings of $3.80 to $4.80 a share and revenue of $11.5 billion to $12.5 billion. Analysts, on average were estimating earnings of $5.04 per share and sales of $11.9 billion.

Revenue for the quarter fell 5 percent to $3.08 billion.

Mylan received a warning letter from the U.S. Food and Drug Administration in November, flagging “significant” manufacturing violations at the Morgantown plant, including “inadequate” cleaning of equipment. The agency also said Mylan failed to thoroughly investigate batches of medicines that failed to meet specifications.

The company said fixing issues at the plant and layoffs that predate the warning letter hurt North American sales in the quarter.

Net earnings fell to $51.2 million, or 10 cents per share, in the quarter, from $244.3 million, or 46 cents per share, a year earlier.

Mylan’s shares closed at $30.62 on the Nasdaq on Tuesday, but fell by about $3 in after-the-bell trading.