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Mylan Expands Recall of Valsartan to All Unexpired Lots

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Mylan N.V. expanded its voluntary recall of blood pressure medicine, Valsartan-based products, in the United States to include all lots of Valsartan-containing products, which have not expired. Late last month, the company had announced a recall of selected lots.

The company is recalling these products, as a precaution, due to traces of an impurity, N-nitrosodiethylamine ("NDEA") contained in the active pharmaceutical ingredient (“API”), Valsartan, manufactured by Mylan Laboratories Limited. This impurity is classified as a substance capable of causing cancer in humans.

Shares of Mylan fell about 3.3% on Dec 4, following the news. Shares of the company have declined 22.1% year to date compared with the industry’s decline of 7.7%.

Valsartan is available as single agent and in combination with amlodipine or hydrochlorothiazide in tablet formulation for the treatment of high blood pressure, thereby treating heart failure and reducing cardiovascular mortality following myocardial infarction. The company has earlier announced recall of at least 15 lots of these products. The company has now expanded the recall to include additional 104 lots including 26 lots of amlodipine and Valsartan Tablets, 51 lots of Valsartan Tablets and 27 lots of Valsartan and Hydrochlorothiazide Tablets, which are available in several dosages. These lots were distributed in the United States between March 2017 and November 2018.

Mylan is currently notifying distributors and patients about the recall of the products and is arranging ways to collect the same.

However, the company has advised that patients should continue with their medication as risks may increase if treatment with Valsartan-based products is stopped altogether without shifting to any alternative therapy.

We note that the recall of these products is likely to impact the company’s top line unfavorably.

We remind investors that Teva Pharmaceutical Industries Ltd. (TEVA - Free Report) had also announced recall of its Valsartan-based products late last month. The API for these products was manufactured by Mylan Laboratories. Several other companies have also recalled similar products.

In a separate press release, Mylan announced the launch of the generic version of Takeda’s Prevacid, a delayed-release orally disintegrating tablet formulation. The generic drug is approved for treatment of active ulcers of the stomach and small intestine, gastroesophageal reflux disease and Zollinger-Ellison syndrome.

Zacks Rank & Stocks to Consider

Mylan is a Zacks Rank #3 (Hold) stock.

A couple of better-ranked stocks include Johnson and Johnson (JNJ - Free Report) and Merck & Co. (MRK - Free Report) . Both the companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

J&J’s earnings per share estimates have increased from $8.14 to $8.16 for 2018 and from $8.61 to $8.66 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all the trailing four quarters with the average being 1.65%.

Merck’s earnings per share estimates have increased from $4.28 to $4.34 for 2018 and from $4.67 to $4.71 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all the trailing four quarters with the average being 3.96%. Shares of the company have increased 39.1% year to date.

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