MYL
#Thank you.
Good afternoon, everyone.
Welcome to Mylan 's conference call discussing our second-quarter 2016 earnings and our acquisition of Meda AB, which I will refer to as the Meda transaction.
Joining me for today's call are Mylan's Chief Executive Officer, <UNK> <UNK>; President, <UNK> <UNK>; Chief Financial Officer, <UNK> <UNK>; and Chief Commercial Officer, <UNK> <UNK>.
During today's call we will be making forward-looking statements regarding our financial outlook and 2016 guidance, the Meda transaction, the acquisition of Renaissance's non-sterile, topicals-focused specialty and generics business, and other matters related to Company and its business, including product regulatory matters, product development, and acquisitions.
These forward-looking statements are subject to risks and uncertainties that could cause future results or events to differ materially from today's projections.
Please refer to the earnings release we filed with the SEC on Form 8-K earlier this afternoon for a fuller explanation of those risks and uncertainties, as well as the limits applicable to these forward-looking statements.
In addition, we will be referring to certain actual and projected financial metrics of Mylan on an adjusted basis, which are non-GAAP financial measures.
These non-GAAP financial measures include adjusted net earnings, adjusted diluted earnings per share, constant currency, total revenue adjusted gross margin, adjusted cash provided by operating activities, net debt to adjusted EBITDA leverage ratio, adjusted R&D expense, and adjusted SG&A expense, and are presented in order to supplement your understanding and assessment of our financial performance.
Non-GAAP measures should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP.
The most directly comparable GAAP measures, as well as reconciliations of the non-GAAP measures to those GAAP measures are available in either our first- or second-quarter earnings releases, which are posted on our website at newsroom.
Mylan.com.
Let me also remind you that the information discussed on the call, with the exception of the participant questions, is the property of Mylan and cannot be recorded or rebroadcast without Mylan's express written permission.
An archived copy of today's call will be available on our website and will remain available for a limited time.
With that, I'll turn the call over to <UNK>.
Thanks, <UNK>, and welcome, everyone, and thank you for taking the time to join us today.
I'd also like to take a moment to welcome <UNK> <UNK>, who joined Mylan as CFO on June 6th and is here today for his first earnings call with us.
In addition, I'd like to welcome to the call all of our employees around the world, including the most recent additions to our family, the great team we acquired on June 15th from Renaissance, and on Friday, the terrific team at Meda.
We're excited about both of these transactions, with the Renaissance business bringing us a complementary portfolio of about 25 branded and generic topical products, which combined with Meda's offerings, positions us to be a leader in dermatology.
The Meda transaction will allow us to build even greater scale across our operations and expand the breadth and diversity of our product portfolio, geographies, and sales channels around the world.
Meda also positions us to be a leader in the global respiratory and allergy market.
In addition, these transactions further strengthen our already very strong cash flows.
As with any transaction, we believe people are the most important asset, and we're delighted with how engaged the teams of both organizations are, as we now focus on fully integrating these organizations so that we can increasingly go to market as one Mylan and maximize the potential of our expanded global platform.
With that, I'd like to elaborate a bit on the commentary I provided during our call in May.
Namely, that we believe that the rebasing of our sector has been a healthy exercise for the industry.
It has helped investors draw more meaningful distinctions among the different types of business models in our sector.
Because as we have mentioned many times in the past, it simply makes no sense to paint the industry with a broad, one-size-fits-all brush, particularly when it comes to generics and specialty, which vary widely in terms of product and geography mix.
In Mylan's case, we have spent the last decade differentiating, diversifying, and derisking by expanding through organic growth and strategic acquisitions.
As a result, we now have extensive manufacturing operations whose technologies range from API to oral solids, to injectables, transdermals, and respiratory expertise.
We have a portfolio that now stands at more than 2,700 separate products, including generics, branded generics, brands and over-the-counter medicine.
We have also positioned ourselves such that we have no significant concentrations in any single product, channel, or business segment.
Moreover, we have continued to grow scale throughout North America, Europe, and rest of world.
All of this has enhanced our financial strength and flexibility, positioning us to continue investing and growing for many years to come.
It's for these reasons we're so proud of our performance during second quarter.
On the top line, we generated total revenues of more than $2.5 billion year over year, an increase of 8% on a constant currency basis, that was fueled by solid growth in our North America and Europe generics regions, and strong double-digit growth in our specialty business.
On the bottom line, we delivered adjusted net earnings of $592 million, or $1.16 per adjusted diluted share, a year-over-year increase of 28%.
I'd also like to underscore that on a sequential basis, our revenues rose by 17%, adjusted EPS increased by 52%, and cash flows increased 240% on the strength across all geographies, all of our business units, including new launches, demonstrating the power of us truly maximizing all of our assets.
Consistent with our historic track record of delivering stronger growth in the second half and on the strength of new product launches, EpiPen seasonality, and our recently completed acquisitions, we are committed to our 2016 EPS guidance range of $4.85 to $5.15.
As I've indicated, we could not be more excited about Mylan's longer-term prospects and look forward to discussing our bright future at our Investor Day event, which we will host in conjunction with third-quarter earnings.
On behalf of Mylan's Board and our entire leadership team, I'd like to thank our employees for their outstanding team work and execution during the quarter and for their continued commitment to our cause.
With that, I'll turn the call over to <UNK>.
Thank you, <UNK>, and good afternoon, everyone.
We continue to see solid performance across our businesses during the second quarter, once again demonstrating that the scale and diversity we have created provides us with strength, consistency, and resilience to ever-evolving market conditions, further differentiating us from our competitors.
We launched more than 100 new products across our global platforms, and with Meda, we now sell approximately 2,700 products around the world.
Overall, our generics business delivered third-party net sales of approximately $2.1 billion for the quarter, an increase of 4% compared to prior-year quarter.
In North America, our generics business grew approximately 6% to just over $1 billion.
Growth came primarily from a significant number of new product introductions, leveraging our strong global platform.
We launched 18 new products during this quarter.
The generic pricing environment was again consistent with our expectations and guidance to you.
<UNK> will elaborate on this topic shortly.
In Europe, sales totaled $604 million, an increase of approximately 6% over the prior-year period.
This result was mainly due to sales of new products and higher volumes on existing products, as we've continued to benefit from integrated approach of selling our established product assets under one Mylan.
Pricing was essentially flat in the second quarter because of our diversified product portfolio.
In rest of the world, sales totaled $523 million, a year-over-year decrease of approximately 2%.
Our operations in India improved throughout the quarter, as we saw HIV tender volumes returned towards our expected levels, resulting in growth of more than 30% on a sequential basis compared to Q1.
Additionally Japan, Australia, and the rest of the emerging markets showed favorable sales on existing products.
With that said, we continue to remain confident in the strength of these businesses.
Our specialty (inaudible) delivered revenue of $403 million in the quarter, a year-over-year increase of 33%, as a result of higher sales of EpiPen, Perforomist, and ULTIVA.
<UNK> will provide more details on this.
Our global platform has been further strengthened and diversified by the growth of our global established brand and branded generics business, as these key brands continue to perform at or about expectations.
This established brands and branded business will be even further enhanced by the addition of the Meda brands.
Meda's attractive portfolio is just one of the reasons why I share <UNK>'s excitement about the recent completion of the transaction.
The addition of Meda strengthens our position in several [therapeutic] franchises, significantly expands our over-the-counter business, and accelerates our expansion in several attractive emerging markets, which will help us further maximize our efficient, high quality operating platform and the broad product portfolio.
During this quarter, we also completed our acquisition of Renaissance topicals business.
By bringing together the Renaissance business with Mylan's and Meda's strong dermatology portfolio, we are confident that we will be able to drive significant growth from this franchise, especially by taking the combined portfolio and pipeline into the new markets outside of North America.
We are looking forward to now moving from pre-integration planning to truly integrating these businesses into Mylan's family.
We are very excited, as we will be moving into integration space, along with the key leaders obtained from Meda and Renaissance leadership.
While we remain focused on business continuity, we also are very excited and upbeat to realize the potential [end] value of bringing together the best of these organizations and our combined efforts.
We also continued to execute on our strategic growth drivers, and let me highlight a few of the developments during the quarter.
Turning first to our biosimilars portfolio, we are pleased to report that we remain on track to file trastuzumab, pegfilgrastim, and glargine to USFDA and European Medical Agency in 2016.
Our 24-weeks [data] from our HERiTAge study for our biosimilar map confirmed the efficacy, safety, and immunogenicity of our product being developed in partnership with Biocon.
This study was presented at the ASCO meeting in June, and we are now expecting to present our results for the 48-week extension of the HERiTAge studies at the important European Society of Medical Oncology Congress in October.
Recently, European Medical Agency has also accepted for review Mylan's marketing authorization application for our proposed biosimilar pegfilgrastim, also being developed [with] Biocon.
In addition to analytical, functional, and preclinical data, the application also includes clinical data from pivotal PK/PD and confirmatory efficacy, safety, and immunogenicity studies completed earlier this year.
The results from the studies are also expected to be presented at ESMO in October.
In addition to this, we continue to make progress on our other programs and will continue to provide further updates as our filings are accepted.
As a reminder, with our Biocon partnership and Momenta collaboration, we have access to a combined portfolio of 15 biosimilars and an insulin analog genetic product in development.
The is one of the industry's [most robust] and diverse portfolios.
As we continue to invest in this important global area, we are continuing to differentiate the structure of our partnerships, for instance, with Momenta, we have a great deal of product-by-product optionality.
On the respiratory front, our partner, Theravance Biopharma, announced that enrollment of more than 2,300 patients has been completed in the three ongoing clinical trials, comprising the Company's Phase 3 program for revefenacin, an investigational LAMA in development for the treatment of COPD.
The replicate efficacy studies are expected to be [let out] in early fourth quarter of this year to be followed by a 12-month, long-term safety study and plan for an NDA filing in 2017.
Regarding generic Advair, we remain confident in our application as we continue to be actively engaged with FDA towards the execution of this very important NDA.
Finally, I also would like to thank our committed and talented global workforce for their significant contributions to our business and mission during this quarter.
With that, I'll turn the call over to <UNK> for some additional perspective on the commercial landscape.
Thanks, <UNK>, and good afternoon, everyone.
I'll start out by saying that I'm extremely pleased to be a part of this call and a part of the Mylan team.
I'll now turn to our financial results.
Second-quarter revenues, grew to $2.6 billion, and that's an increase of 8% over the second quarter last year.
As <UNK> already noted, our generics segments grew 4% and our speciality segment grew 33%.
The generics pricing environment was consistent with our expectations and declined at a mid-single-digit rate overall in the quarter.
While foreign currency movements were volatile following the outcome of the Brexit vote in late June, the year over year impact of currency translation on our second-quarter result revenues was insignificant due to the diversity of our portfolio of businesses across all geographies.
As <UNK> noted, second-quarter revenues increased 17% sequentially, with growth in both of our segments and all three geographies.
Adjusted gross margins for the second quarter were 56%.
That's up approximately 200 basis points from the prior year and the prior quarter, as a result of the new product introductions and favorable specialty sales.
Moving on to operating expenses, on an adjusted basis, R&D expense increased slightly over the prior year, as we continue to invest in our respiratory, insulin, and biologics programs.
As a percentage of revenue, second-quarter R&D declined by approximately 50 basis points from the prior year to 6.6% of total revenues.
SG&A expense, also on an adjusted basis, remained essentially unchanged at approximately 21% of total revenues in the second quarter.
As a result of our strong operating performance, adjusted net earnings increased by $118 million from the prior-year quarter to reach $592 million, and adjusted diluted EPS increased 28% to $1.16 compared to $0.91 in the prior year.
I will also point out that adjusted diluted EPS grew 52% sequentially from the first quarter of this year.
For the six months ended June 30th, total revenues grew to $4.8 billion; that's a year-over-year increase of 13% on constant-currency basis and includes an additional two months of sales from our established products business.
Adjusted gross margins for the six months ended June 30th were 55%, or up approximately 100 basis points from the prior-year period.
Adjusted R&D and adjusted SG&A expense were approximately 7.5% and 22% of total revenues respectively for the year-to-date period.
As a result, adjusted earnings for the six months ended June 30th increased by $195 million, to reach $979 million and adjusted diluted EPS, therefore, increased 19% to $1.92.
Turning to our cash flow and liquidity metrics, adjusted cash provided by operating activities was strong, at $485 million for the quarter, which drove the first-half adjusted operating cash flow to reach $687 million.
The strong performance in the quarter reflects improvements in our operating results combined with our continued focus on effectively managing working capital.
During the second quarter of 2016, we issued $6.5 billion of senior notes in anticipation of the completion of the Meda offer and repaid $500 million of senior notes which became due in June 2016.
We have no amounts outstanding on our accounts receivable securitization or our revolving credit facilities.
At the end of Q2 our net debt-to-adjusted-EBITDA leverage ratio was 2.2 times.
We remain fully committed to maintaining our investment-grade rating and reducing our leverage subsequent to the closing of the Meda transaction.
Looking ahead, we feel confident with our ability to continue to leverage our outstanding global operating platform, which now includes the recent acquisitions of both Renaissance and Meda, and we're committed to our 2016 outlook of adjusted diluted EPS in the range of $4.85 to $5.15.
In terms of phasing of our earnings for the remainder of 2016, Q3 will again be our strongest quarter and slightly higher than Q4.
With that, we'll open the call up to your questions.
Hi, <UNK>, thanks.
So I'll start on the US generics, and then if <UNK> or <UNK> want to add anything.
From my perspective, as we've continued the dialogue around the diversifying and the differentiation and product mix, and the breadth of portfolio, certainly, as you look at some of the smaller players, I think weaknesses from the niche product, as well as, perhaps, how they were playing their business and positioning it.
And I think that the other thing you have to take into consideration is balancing that, to your point about does it drive more irrationality, is our customers that are continuing to get more global, and their demands and needs are getting far greater.
And I know <UNK> touched on this in his remarks, but I really think that shouldn't be underestimated.
The need for a reliable supply is continuing to, I think, again, be a differentiator for Mylan and our ability to meet these global needs in a very reliable ---+ as we've touted before, through sheer hard work that has been put together this last decade is a supply chain that we believe is second to none.
And, I think you see some value, continued value, being placed on that by our customers.
So I can't speak ---+ as we've always said, our business is going to be competitive.
It always has been, it always will be.
But I don't sense, I would say, that hyper competitiveness that we've seen, say, five years ago when our customers were much more willing to change just based on price, and not necessarily be focussed on if that company could actually supply their needs.
So I think, it continues to shift towards being a not only a differentiator for us, but a real value driver and growth driver for us, which is why we have the confidence around the stability in the market.
As far as EpiPen goes, <UNK>, here is what I'd say.
You've heard me say this a thousand times: all good things don't happen at once; all bad things don't happen at once.
When you're looking at the complexity of our Company, globally, across geographies,, across channels, across products, we believe that when we came out with our guidance this year, we anticipated, obviously, the Meda transaction.
We anticipated a lot of probability waiting on launches, and so forth.
And with all of that being said, I think when you look at our guidance range of being within 3% each way of the midpoint, that we believe that's a very tight range and we believe it's taken a lot in consideration.
And we've always said when we feel that that ---+ we should update or move that guidance, we're the first to come and do that to the market.
But we believe right now that it is absolutely taking a lot into consideration given all of the moving pieces across our platform.
Thanks, <UNK>.
I will start on EpiPen and then hand it over to <UNK>.
<UNK>, I love the opportunity to clarify this point around insurance and the changing dynamic and the payer landscape.
It really is not ---+ the point is not being made from our earnings perspective or what we see with EpiPen.
I will continue to say that we couldn't be more proud of our investment top expand and increase access and continue to see EpiPen as an important product to the community.
And as, again, <UNK> mentioned, our opportunity to even enhance that throughout Europe now with the Meda transaction.
But this point, I think there has been a lot of discussion and some headlines around patients going from paying a co-pay to now paying the entire cost of a product.
And where EpiPen falls, because if you look on an annual basis, as a life-saving drug, to have a [whack] price that, just under $600, I think that you can see it falls as not an expensive product.
And so when employers through high deductible plans that were incentivized to increase high deductible plans through Obamacare, as people ---+ as employers shift more cost to employees and make that everything has got to come out of pocket before you hit your deductible, is where you're seeing a lot of noise around EpiPen.
And so from our perspective, we're continuing to try to do our part on educating on that supply chain and we all know it's complex and our healthcare and insurance is complicated.
But we are just continuing to try to do our part, messaging and continuing to do everything we can to ensure patients have access to our product.
And so that really is the point on the insurance, not at all from what we're projecting from a business perspective around EpiPen.
And regarding Advair, generic Advair, Ronnie, our [confidence] comes from two data points.
One, we have been seeing the generic Advair has been unique in a way, just given the FDA's engagement not just after the filing but before filing, the number of interactions, agreement on protocols, agreement on what their expectations are.
All of this has been built in, in the [science], number one.
Number two, you will see that over the last five months we have seen a huge movement of both the execution of this [product] ---+ just to let you get an appreciation about various PAIs, pre-approval inspections, which is around device or a [direct substance] or as a [direct product] is all behind us.
And our confidence, again, comes back from how we see the filing being executed as until date.
So we are, I think, very confident about that maybe we'll be able to improve the FDA's [partial] date of first round of approvals.
Well thank you, <UNK>.
As far as the buyback goes, I ---+ first, let me start with this.
As you know, we are constantly looking at our capital allocation, and the absolutely the share buyback is an option of how we ---+ of being part of the mix.
So we absolutely ---+ it's back on the table as an option that we have.
Just as we're looking at many other ways.
I can tell you, though, our priority is really to delever.
It is about really making sure we're balancing all of that, but it absolutely is back on the table as an option.
As far as the $6, I just want to ---+ because sometimes you guys throw these little flippers in there.
What we've committed to is $6.00 in '18.
What we've said since announcing the Meda transaction is we have the opportunity to hit that earlier.
But what we are absolutely committed to is the $6.00 in '18.
And as far as IPR, I'll speak to the confidence, and then <UNK>, anything you want to add ---+ or <UNK>, on the market opportunity.
We couldn't be more confident in the IPR, the process, and where we stand in that and are anxiously awaiting the results of that next week.
And I would just remind on our confidence to get the product approved, look, the reality is that the transformation that FDA has gone through and is going through over these last couple of years with GDUFA, there have been casualties to that and there's been casualties in the backlog and how they're being able to handle them as they move towards GDUFA goal dates.
And obviously, Copaxone fell prior to getting a GDUFA goal date like our generic Advair.
All I can say is speaking on the science and speaking to our application on both the 20 and 40, that we absolutely have all of the confidence in the world of getting it.
But, as you know, I've said I'll love the fact when we're not talking about when we're going to get Copaxone approval.
I will just add that we appreciate it's been a painstakingly long process with FDA, but we just have a very minor clarification from FDA we received recently, we just responded to.
And there's nothing else scientifically pending at all, and we are waiting to hear from FDA about the next step.
So that's where ---+ we are pretty confident about bringing this product in the market as soon as possible and hopefully in 2016.
And we think the opportunity is still significant.
It's a big product and we still believe that it's going to be ---+ it will be a good product for us.
So let me start, <UNK>, and then again, I'll let others chime in.
As far as the mix goes, and I think what we tried to articulate especially on the specialty side, is that it is a combination of certainly ---+ we've seen nice growth in volume.
Yes, part of that has been through the pricing dynamic, but more ---+ I think more of note is this idea of the net price.
And what <UNK> spoke about is that our realizing these renegotiated contracts, which we've now said starting at the end of last year, that those wouldn't happen overnight.
But as we've continued to renegotiate, and as we said, it's not just about one product; it's a whole portfolio of products, we've been able to continue to see that increase.
And so, again, I think as far as us realizing those margins are sustainable as we work ourselves through these contracts.
And if the dynamic around EpiPen market would ever change, those would change as well.
But I think what we're continuing to benefit now is the realization of those.
And I think as far as generic.
I would say, <UNK>, you can add, that we are holding pretty well the volumes.
We see the volumes pretty flat, and we have guided you to mid-single-digit [erosion] over the year.
And we are seeing nothing else than [the middle] single digits and that is what we are forecasting for the rest of the year.
Yes, so, I would say, first, marginally a little earlier.
We had said Q3.
But I think importantly, <UNK>, to your point, I, look, could not be obviously, more confident in hitting the $6.
I think that we look forward to the opportunity to bring that up.
I think ---+ I can't wait to get to Investor Day that we've now announced to be part of Q3.
Because I think our opportunity to really showcase these assets that we've pulled together from Abbott to Famy Care to Renaissance to Meda, is really going to showcase this platform and our ability to really maximize these assets.
So I don't want anything to take that away, and I can tell you we are very, very focussed on the opportunity and how we pull that forward.
So there is ---+ like I said, I hope you can hear the inflection in my voice that there is nothing that we're more focussed on.
And yes, I think we're still on track.
There is nothing that has changed that would change the accretion number that we talked about.
Again, I think in the Q3, once we have a couple months under our belt and we're able to come forward with a long-term ---+ our long-term vision and road map and ability to execute against that, as hopefully our track record speaks for itself.
Again, we're going to be able to show you how we're able to do more with these assets coming together than they were doing on an individual basis.
Let me respond to the rest of the world business.
If you recall in the first quarter, we have seen [lead patch] for HIV tenders because the global (inaudible) and [K-monix], which is a new agency managing the tenders has not [located].
And it took them time for that machine to warm up and we started influx ---+ seeing influx of tenders towards the middle of May.
So we have seen a sequential growth of 30% on this business; everything is now back on the expected levels, which we were expecting.
So nothing is inherently weak with that business.
In fact, we are very excited by the volumes being packed.
That is what has (inaudible) to the 2% year-over-year decline of this overall business.
And as far as EpiPen goes, Doug, no concerns at all.
We see inventory absolutely in the normal range.
Well, <UNK>, as always, you do not disappoint about getting a lot in to your questions.
So let me start with the rebasing, because I do feel passionately about this as being in this industry for as long as I've been.
Look, I am hopeful that the rebasing continues, but this is not memory loss in about a month and hot air starts building back up again.
Because I think that what we found ourselves in the generic speciality sector is unsustainable business practice.
And I think that it just ---+ it's just that simple.
And I think individual companies are now having to ---+ however much affected they may have been by an unsustainable business practice, they're having to regroup, reorganize, rebase themselves.
My hope is that, as I mentioned, that that has driven, I think, forcing a much more thoughtful look at businesses and understanding the mix because all companies aren't created equally.
And, like I said, I'm hopeful that Wall Street doesn't have short-term memory loss and goes back to trying to paint all with one or trying to support what I don't believe is sustainable long term.
So we believe there has been a lot of short-term focus.
We have said you can't build a great company quarter by quarter; it's over the longer term.
The last decade we have continued to hopefully show that that pays off in both the near, mid, and long term.
And we look forward to coming back out to you guys on Investor Day and showing you how, one, that the ability for us now to take this significant financial flexibility we have and continue to build and complement this platform we've put in place, which will, to your point, continue to consolidate, I think those assets the companies need to let go of, products, and small nice tuck-ins like we just did with Renaissance.
And as far as OTC, I'll have to ask you to wait for Q3, because I think we really want to come out in a holistic way, talk about our geographies, these channels, and how truly we believe approaching these markets with a one Mylan approach, we're going to be able to do more.
So, anyway, look forward to that.
Okay.
Thank you, <UNK>.
So I'll start with integration.
Look, I hopefully, by now, the fact of our business continuity and our track record would let you realize the fact that we are not only very focused on integration but have a very disciplined approach.
That it's not just about bringing the company into the fold; it is truly about integrating businesses, people, best practices.
And so, as we are now doing that for over these acquisitions, most recently Meda, we absolutely, I can assure you, have multiple work streams.
As we had reported last quarter actually, our pre-planning phase of that allows us to hit that ground running once we hit day one.
And I can tell you I'm confident that when we do lay out those plans and those opportunities, they're very robust.
They cut across all geographies.
So we're not prioritizing one over the other.
The benefit of having great people and bringing their management team into the fold of our management team, we're able to really divide and conquer across the globe, across channels, and across these great brands and especially, this new channel of OTC.
o we couldn't look more forward to coming and highlighting that, and I don't feel I can give much more of a teaser than that for Investor Day.
As far as guidance is concerned, look, we've got ---+ when you look at the complexity of not only our business in general and the generics business, both here in the US but around the globe, that's why, as we've continued to grow specialty, grow brand generics, grow our brands, grow OTC, it is just for that reason of complexity and volatility that we've said the diversification and differentiation lets us absorb that now, our scale.
Our sheer size and scale is able to absorb that volatility and manage this business.
And hopefully, when I look ---+ and that's why I said I couldn't be more proud of Q2, that we were able to be right on top of revenue, beat our ---+ the EPS consensus, and all sequentially, because I know many of you that I had discussions with after last quarter, everybody felt that we were taking such a big leap from Q1 to Q2 that if we could show that this business could perform of what we said it was going to do, that certainly would pave the way for the growth and, hopefully, market multiple that should respond to that accordingly.
So, that's why I highlighted the sequential growth of not only top line 17%, bottom line 52%, and the strength of our cash flows.
So, like I said, I think that hopefully, you're realizing our guidance takes a lot into consideration and our ability to manage to that, and perform and deliver.
Again, I think this quarter is just underscores this management team's ability to do that.
Sure, <UNK>.
So, look, <UNK>, as far as painting a picture, we will paint a very detailed picture.
We obviously have owned them now for all of a week.
To my point earlier, our planning around just that, the geographies, the products.
Unfortunately, we could get work streams and people aligned, but as you know, the Swedish takeover rules did hinder as far as some of the detail ---+ of getting into the details.
So I can assure you that over these next couple of months, we will be putting the machine that we've put in place, from an integration office perspective.
And I can assure you, like I said, we've retained the management teams, and it is really about us integrating, as I said, best practices.
This isn't just come in and do it the way Mylan's done it.
We're getting new businesses, new business channels, new products, new brands, that it is about learning from each other, and really that's been our success in the past.
I look at the Abbott/EPD business, we brought that business in.
It was different products than we've been in before, some different channel.
And really bringing that management team and that business in fold, we've been able to show we could do more together than they were doing on an individual basis.
I can assure you I have all the confidence in the world that Meda will be that same story, and we look forward to coming with that very pretty picture around Q3.
<UNK>, on your question around the acquisition-related costs, I'll answer the question.
I'll also point out that we filed our 10-Q concurrently with this call and we have those details in there.
But primarily the biggest chunk of that $174 million of cost is really due to the financing-related acquisition costs around Meda.
And we've broken out in there that we did some purchase of Swedish krona ahead of time.
We had an unrealized loss on that due to the movement over the time period.
And also the fees related to the financing and the existing bridge loan facility that we took into place.
All of that is broken out in the footnote there, but that is substantially all of the costs.
On the IFRS accounting side, as you know, we also prepare Mylan's books and records on both US GAAP and IFRS basis.
We started that process last year.
We will continue to basically just roll the Meda process into that.
So we've already done it through ---+ with the Mylan accounts, and we'll do it the same way with the Meda accounts.
No, I'll reiterate that there is nothing out of the norm when we look at our EpiPen business right now.
And, again, as we stated, we're going to have to continue to evolve until we get one year under our belt from the Auvi-Q recall, because obviously, how that plays out, especially in Q4, that will continue to evolve.
As far as just the overall strength of EpiPen, I think as we've talked before, the brand equity of EpiPen, the life-saving nature of this important medicine, our continuing to educate and invest in the access to this product, I believe that EpiPen will be a very, very important product for a very long time.
With that being said, I think as I said earlier in my remarks, we don't have significant concentration from any one product or business segment at Mylan today.
And as we continue to grow, just as now we're bringing Meda into the fold, EpiPen, from a true dollar contribution, will just continue to shrink.
So, again, there is no over-reliance on EpiPen as a brand, but I can tell you that there is every bit of focus on the role EpiPen plays in the lives and saving lives and then getting to as many patients as we possibly can.
So that's what I would say about our EpiPen franchise.
So <UNK>, we have said ---+ think I've been pretty consistent on this for years as we bring in acquisitions, I think that as we did with Abbott for that first year, we broke out, so you could continue to see the growth from Mylan and the growth from EPD.
But honestly, because of our robust integration processes and bringing these companies together, it's now Mylan legacy.
So for me to sit here and try ---+ that is what we're ---+ our business is.
And like I said, Q3 we'll look forward to being able to now highlight Mylan in this platform and now bringing Meda into the mix.
But it would be ---+ it's just not even possible for us to break it apart that way anymore, because we truly are going to market as one Mylan, and we have got strong products, strong brands, that's complementing the retail segment, the physician channel, and now the OTC channel.
So all I can say is that we continue to see robustness around these products that we've brought in and we've continued to grow them.
And as far as Advair, I can't ---+ I will just say that obviously when you have an $8 billion, $9 billion brand product, we couldn't be more excited to bring the generic to an affordable alternative to market.
And again, think there will be significant barriers to entry just given the complex dynamics.
And so I can't ---+ I think it will be an incredible important product that we'll be able to bring to patients.
So as far as Renaissance goes, no, we're not ---+ we don't break out product-level contribution.
As I said, we acquire 25 brand and generics and brought them in the fold June 15th And, as I said, when you look at that combined with now the Meda assets in derm that we're bringing on board is really going to allow us to be a leader in that space.
We think the derm space is a nice niche space.
It's one that we didn't have critical mass around before.
And again, just like all of our other product lines, bringing that kind of critical mass and combined with the critical mass we have around all of these other therapeutic franchises, we're again just able to leverage them and maximize them from our global customers to meaning the most to our patients.
As far as biosimilars, I would challenge that no one has doubled down in this field any more than we have.
We have now access to up to 15 products on a global ---+ optimizing our global commercial platform.
So, we will continue, obviously, to invest very heavily.
But I will suggest that we have more investment in biosimilars today, and certainly as we look over the horizon from an R&D perspective.
Okay.
Well, thank you, thank you, guys.
We appreciate all of your questions and look forward to seeing you soon.
