Mylan presses on with tax-inversion Abbott deal

(Reuters) - Political opposition to tax-inversion deals will not stop Mylan Inc's MYL.O purchase of some non-U.S. businesses from Abbott Laboratories ABT.N, Chief Executive Heather Bresch said, even as some companies have backed away from such tax arrangements.

Mylan is looking at further “strategic” deals in the near future, Bresch added on Thursday, as the company trimmed the top end of its revenue outlook for the year - sending its shares down as much as 5.3 percent.

Mylan’s deal to buy Abbott’s specialty and generics business in developed markets outside the United States will move its tax address to the Netherlands, cutting costs because of lower corporate tax rates there.

President Barack Obama and a string of lawmakers have opposed such tax inversions and pledged action to discourage them but Bresch played down the risk.

She said it would be challenging to change the U.S. tax code to stop inversion without punishing other foreign companies, which would hit the health sector as nearly half of the drugs and medical devices sold in America come from elsewhere.

“Being punitive and not allowing us to be competitive, I do not believe, is in our country’s best interest, and I hope that prevails at the end of the day,” Bresch told analysts on a post-earnings conference call.

“We’re obviously continuing to pay U.S. taxes, as well as a lot of these foreign companies are paying U.S. taxes and creating U.S. jobs.”

The Abbott deal, announced in July, gives Mylan access to Abbott’s specialty and generics business as well as moving its tax address.

Nine tax-inversion deals have been agreed by U.S. companies this year although drugs retailer Walgreen Co WAG.N decided not to move offshore in its full takeover of Europe's Alliance Boots [ABN.UL], following fierce criticism of the practice.

Meanwhile, Mylan is still out shopping. Bresch raised the prospect of other deals even before the completion of the Abbott deal, due early next year.

“There’s a lot of opportunities out there, and we are looking at everything,” she told analysts.

Operationally, Mylan was more downbeat as it shaved the top end of its revenue and earnings forecasts for this year, citing delays in approval from the U.S. Food and Drug Administration for key generic drugs that it plans to launch this year.

A generic version of Teva Pharmaceutical Industries Ltd's TEVA.TATEVA.N multiple sclerosis treatment, Copaxone, and Pfizer Inc's PFE.N blockbuster Celebrex, an anti-inflammatory treatment for arthritis, have both been delayed by the FDA.

Mylan said it still expected to launch them in the fourth quarter, adding that a delayed launch of Copaxone to next year would not affect its updated revenue and profit forecast for this year.

The drugmaker forecast full-year 2014 revenue in a range of $7.8 billion to $8.0 billion and earnings of $3.25-$3.45 per share, a forecast that includes a fourth-quarter launch of generic Copaxone and Celebrex.

It had earlier forecast full-year revenue of $7.8 billion to $8.2 billion and earnings of $3.25-$3.60 per share.

Analysts on average expect full-year 2014 earnings of $3.37 per share on sales of $7.7 billion, according to Thomson Reuters I/B/E/S.

Mylan posted a second-quarter adjusted net profit attributable to shareholders of $273.3 million, or 69 cents per share - a penny shy of the average analyst estimate.

Mylan shares fell as low as $45.36 before recovering much of their lost ground to trade on the Nasdaq at $47.63 by early afternoon.

Editing by Rodney Joyce and Kirti Pandey