Mylan agrees to $465 million settlement over EpiPen classification

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Mylan NV on Friday said it will pay $465 million to settle the question of whether it underpaid U.S. government healthcare programs by misclassifying its EpiPen emergency allergy treatment.

Mylan also lowered its 2016 earnings outlook, but it affirmed its 2018 forecast and shares of the company rose 11 percent to $39.90 after hours.

"Kudos to management for fast action," AB Bernstein analyst Ronny Gal said in a video message to investors. "This was one of the major risks everyone was focusing on ... now it is essentially off the table."

Mylan, which will make the payment to the Department of Justice and other government agencies, said the settlement does not include any finding of wrongdoing.

Figures released by Centers for Medicare and Medicaid Services on Wednesday showed that U.S. government health plans spent more than $1 billion on Mylan's EpiPen between 2011 and 2015.

U.S.

"government healthcare programs by misclassifying its EpiPen emergency allergy treatment.Mylan also lowered its 2016 earnings outlook, but it affirmed its 2018 forecast and shares of the company rose 11 percent to $39.90 after hours."Kudos to management for fast action," AB Bernstein analyst Ronny Gal said in a video message to investors"lawmakers have contended that Mylan underpaid rebates to state Medicaid programs by misclassifying EpiPen as a generic instead of a branded drug. The Medicaid rebate for a generic is 13 percent compared with a minimum 23.1 percent for a branded drug.

Mylan said will record a pretax charge of about $465 million in the quarter ended Sept. 30.

The company, citing changes to the EpiPen consumer discount program and upcoming launch of a generic version of the treatment, said it now expects full-year 2016 adjusted earnings per share of $4.70 to $4.90, down from a previous range of $4.85 to $5.15 per share.

Mylan said it "remains committed" to its target of at least $6.00 in adjusted earnings per share in 2018.

(Reporting by Narottam Medhora in Bengaluru and Deena Beasley in Los Angeles; Editing by Don Sebastian, Cynthia Osterman and Bernard Orr)