"Also, the president's recent budget proposed several measures to get more generics to market. So the generic drug industry does have the winds at its back in contrast to the headwinds faced by Big Pharma.

"Talk about headwinds for Big Pharma ... nearly $100 billion of branded drugs will be coming off patent over the next 5 years and subject to lower priced (and lower cost) generic competition.

"This is a bigger number for the next five years than I can ever recall ... by double. And of course this is a huge wind at the back of generic drug companies.

"Mylan is the third largest generic drug company on the planet, having recently bulked up by acquiring 70% of Matrix Labs in early 2007 and Merck Generics in October of 2007, more than doubling its size.

"Indeed Mylan is ready to get at least its fair share. Mylan submitted 154 product applications globally, of which 72 were abbreviated new drug applications (ANDAs) filed with the FDA here in the U.S.

"The company ended 2008 with a total of 120 ANDAs pending FDA approval. Of these, 32 are 'first-to-file' opportunities usually guaranteeing 180 days of generic exclusivity; these first-to-files target branded drugs with a whopping $16 billion in sales.

"Combining all this with the need to lower the cost of health care by increasingly encouraging the use of generic drugs and the $100 billion of branded drugs coming off patent over the next five years, and you can see the opportunity that Mylan has here.

"Mylan's specialty pharmaceutical business, Dey, markets EpiPen, an epinephrine auto injector for severe allergic reactions, for example, to bee venom or peanuts ... which for some can be life threatening.

"For 2009 Mylan recently reiterated guidance of EPS growth to $0.90 to $1.10 (it made $0.26 in Q4) followed by $1.50 to $1.70 in 2010. At the mid-point this represents 25% EPS growth in 2009 and 60% growth in EPS in 2010, vs. a PE of 14 on 2009 EPS (and 8.5 on 2010).

"Our proprietary BI Rank is a strong 9.9 (out of 10), Zacks ranks it 1, Value Line a 2, and S&P gives it 5 stars. In addition to all the foregoing, $700,000 of insider buying at $12.90 once Q4 was reported convinced me this is a solid investment opportunity."

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