Rising generic drug sales in North America helped push up Mylan Inc's quarterly profit by 35 percent and the drugmaker raised its earnings forecast for 2012, even as it steps up spending on its own drug research.
The company's generic revenue jumped 10 percent to $1.5 billion in the third quarter, as the expiry of patents on several blockbuster drugs expand the market for generics.
Shares in Mylan, which launched a version of Novartis AG's hypertension drug, Diovan HCT, in late-September, jumped 3.6 percent in early trading on the Nasdaq.
The company raised its full-year 2012 adjusted earnings forecast to between $2.50 and $2.60 per share, up from $2.45 to $2.55.
Analysts expect 2012 earnings of $2.52 per share, according to Thomson Reuters I/B/E/S.
However, the drugmaker's research and development spending jumped 53 percent to $108.25 million as it looks to develop its respiratory and biologics programs to replace an expected slowdown in generic sales growth after 2013.
The patent expiry on several big-selling drugs stretches through 2016, but the biggest drugs will have lost their patent protection by next year.
Mylan, one of the world's largest generic drugmakers with more than 1,100 products, currently derives about 16 percent of revenue from its specialty drug business -- which involves the development of branded injectable products, such as EpiPen, its anti-allergen delivery product.
Third-quarter net income rose to $211.3 million or 51 cents per share, from $156.7 million, or 36 cents per share, a year earlier.
Excluding one-off items, Mylan earned 83 cents per share, beating Wall Street estimates of 77 cents per share, according to Thomson Reuters I/B/E/S.
Total revenue rose nearly 15 percent to $1.81 billion, but fell short of analysts' expectations of $1.85 billion.
Sales in North America rose 19.2 percent to $837 million.
European sales were hit by government price cuts, which saw sales in the Europe, Middle East and Africa region fall 7.2 percent to $325.6 million.
Shares of Canonsburg, Pennsylvania-based Mylan traded as high as $24.81 at the Nasdaq before easing back a little to $24.74.
(Reporting By Pallavi Ail in Bangalore; Editing by Rodney Joyce)