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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report pursuant to Section 13 or 15(d)of the Securities
Exchange Act of 1934For the fiscal year ended March 31, 1999 Commission
File No. 1-9114
MYLAN LABORATORIES INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1211621
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1030 Century Building
130 Seventh Street
Pittsburgh, Pennsylvania 15222
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 412-232-0100
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
Common Stock, par value $.50 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes...X.... No.......
Indicate by checkmark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant, computed by reference to the closing price of such stock as of June
22, 1999:
$3,180,346,246
The number of shares of Common Stock of the registrant
outstanding as of June 22, 1999:
129,153,311
Documents incorporated by reference into this Report are:
Annual Report to Shareholders for year ended
March 31, 1999... Parts I and II,
Items 1, 5-8
Proxy Statement for 1999 Annual Meeting of
Shareholders... Part III, Items 10-13
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PART I
Item 1. Business
Mylan Laboratories Inc., a Pennsylvania corporation incorporated in 1970,
and its subsidiaries (herein referred to collectively as "the Company") are
engaged in developing, licensing, manufacturing, marketing and distributing
generic and branded pharmaceutical products. References herein to fiscal 1999,
1998 and 1997 shall mean the fiscal years ended March 31, 1999, 1998 and 1997,
respectively.
The Company conducts business through its generic and branded
pharmaceutical operating segments. For fiscal 1999, the generic segment
represented approximately 88% of revenues and the branded segment represented
approximately 12% of revenues. The financial information for operating segments
required by Item 1 is hereby incorporated by reference to Note R of the Notes to
Consolidated Financial Statements in the accompanying Annual Report to
Shareholders for the year ended March 31, 1999.
Generic Segment
Through its subsidiaries, Mylan Pharmaceuticals Inc. and UDL Laboratories
Inc., acquired in fiscal 1996, the Company is recognized as a leader in the
generic pharmaceutical industry. Generic drugs are bioequivalent to their brand
name counterparts and are generally sold at prices significantly less than
branded products. Accordingly, generics provide a safe, effective and cost
efficient alternative to users of these products.
The Company attained its leadership position in the generic industry
through its ability to obtain ANDA approvals, uncompromising quality control and
devotion to customer service. To build on this position the Company has expanded
beyond its traditional solid oral dose products and now offers unit dose,
suspensions, liquids, transdermal and extended release products. The investment
in research and development and facilities to manufacture products in a variety
of delivery systems is one of the many reasons the Company is a leader in the
generic industry.
The Company has entered into strategic alliances with several
pharmaceutical companies through distribution and licensing agreements which
provide the Company with additional products to broaden the Company's product
line. In addition, the Company has entered into product development and
licensing agreements, under which the Company has obtained rights to manufacture
and distribute additional pharmaceutical products in exchange for funding of
drug development activities.
Due to the non-exclusive nature of generic products, the generic industry
is comprised of numerous competitors including manufacturers that market their
products under their own names, distributors that market products manufactured
by others, and brand name companies that market their products under both the
brand name and as the generic substitute. The non-exclusive nature thus allows
for significant price competition within the pharmaceutical industry.
Branded Segment
Pharmaceutical products initially sold on an exclusive basis are known in
the industry as proprietary or branded products. These products generally are
patent protected when introduced in the marketplace.
The Company operates its branded segment principally through its Bertek
Pharmaceutical Inc. ("Bertek") subsidiary. Bertek's three therapeutic areas of
concentration include cardiology, neurology and dermatology. The cardiology
focus is built upon Maxzide(R), Clorpres(TM) and Nitrek(R). The Maxzide(R)
products were reacquired from American Home Products Corp. ("AHP") in fiscal
1997. Since 1984, these products, which were developed and manufactured by the
Company, were marketed by AHP under a worldwide license agreement.
The Company continues to expand its branded business through internally
developed products as well as through product acquisitions. To expand its
presence in dermatology, on October 2, 1998, the Company acquired 100% of the
outstanding stock of Penederm Inc. ("Penederm"). Penederm develops and markets
through Bertek patented topical prescription products. The current product
portfolio consists of Avita(R), Mentax(R), and Acticin(R). Penederm maintains
administrative and research and development facilities in Foster City,
California.
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New Product Approvals
The Company is required to secure and maintain the U.S. Food and Drug
Administration's ("FDA") approval for the products it desires to manufacture and
market. The FDA grants such approval by approving Company submitted Abbreviated
New Drug Applications ("ANDAs") for generic drug products and New Drug
Applications ("NDAs") for branded drug products.
During fiscal 1999, the Company received ten final ANDA approvals:
Clomipramine HCl Capsules, Hydroxychloroquine Sulfate Tablets, Nystatin Oral
Suspension, Glyburide Tablets, Ranitidine Tablets, Acyclovir Tablets, Clonazepam
Tablets, Etodolac 500mg. Tablets, Albuterol Sulfate Syrup, and Extended
Phenytoin Sodium Capsules. Presently, the Company has before the FDA 35 ANDAs
pending final approval.
Also in fiscal 1999, the Company was awarded by the FDA a NDA approval for
its wound care product Sulfamylon(R). Presently, the Company has nine
Investigational New Drug (IND) applications filed with the FDA for new innovator
compounds. An IND is the result of a successful preclinical development program
and becomes part of the final NDA.
Products
The information on the Company's product line set forth on pages5-13 and 18
of the accompanying Annual Report to Shareholders for the year ended March 31,
1999 is incorporated herein by reference. For fiscal 1999, sales of the
Company's antianxiety product group accounted for approximately 22% of revenues.
During fiscal 1999, 1998 and 1997, the Company expensed $61,843,000,
$46,278,000, and $42,633,000 for research and development. The Company's
research and development efforts are conducted primarily to qualify the Company
to manufacture ethical pharmaceuticals under FDA standards and approval.
Recently this has included increased spending for innovative compounds and
transdermal delivery system technology. Typically research expenses related to
the development of innovative compounds and the filing of NDAs are significantly
higher than those associated with ANDAs. As the Company continues to develop
these products, research expenses related to their development will continue to
increase.
Customers and Marketing
The Company sells its products to proprietary and ethical pharmaceutical
wholesalers and distributors, drug store chains, drug manufacturers and public
and governmental agencies. Three customers accounted for approximately 15%, 14%,
and 11% of net sales in fiscal 1999 and 13%, 12%, and 11% of net sales in fiscal
1998. No single customer represented more than 10% of net sales in fiscal 1997.
Generic pharmaceutical products are marketed to pharmaceutical wholesalers
and distributors and certain food and drug store chains. These customers in turn
market to retailers, managed care entities, hospitals, government agencies and
consumers. Generic products involve limited public promotion. Approximately 80
employees are engaged in selling and servicing generic customers.
Branded pharmaceutical products are marketed directly to health care
professionals. Approximately 200 employees are engaged in marketing, selling and
servicing branded customers.
Competition
With respect to each of the generic products it sells, the Company believes
it is usually subject to active competition from numerous companies. The four
primary means of competition are service, product quality, FDA approval and
price. The competition experienced by the Company varies among the markets and
classes of customers. The Company has experienced additional competition from
brand-name competitors that have entered the generic pharmaceutical industry by
creating generic subsidiaries, purchasing generic companies or licensing their
products prior to or as their patents expire.
In addition to the increase in the number of competitors, the consolidation
of the Company's customers through mergers and acquisitions, along with the
emergence of large buying groups representing independent pharmacies and health
maintenance organizations, have contributed to severe price deterioration for
many of the Company's generic products. While the Company has increased unit
volume of its generic products through
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specialized marketing programs, this has not fully offset the price declines the
Company has experienced.
Severe price declines for generic products over the last several years,
along with the increased costs in bringing new generic products to market, led
the Company to an extensive evaluation of its operations. This ongoing
evaluation includes assessing the Company's relationship with key customers and
suppliers, production capacity and product level contributions. One of the key
conclusions of this evaluation was the determination that changes in the
Company's generic pricing practices were needed.
In the second half of fiscal 1998, the Company raised prices on seven
generic products. During fiscal 1999, the Company raised prices on 22 additional
products. While these price increases had a favorable impact on net earnings,
such impact, if any in the future, will be affected by many factors including
customer acceptance and the response by both existing and potential competitors
as well as by both existing and potential suppliers. The Company intends to
continue to work closely with its customers and suppliers to ensure that its
full line of generic products continues to be available as a cost effective
alternative to the innovator products.
In the branded segment, the Company faces competition from other branded
and generic pharmaceutical companies that offer products which, while having
different properties, are intended to provide similar benefits to the consumers.
Product Liability
Product liability suits by consumers represent a continuing risk to firms
in the pharmaceutical industry. The Company strives to minimize such risks by
adherence to stringent quality control procedures. Although the Company carries
insurance, it believes that no reasonable amount of insurance can fully protect
it against all such risks because of the potential liability inherent in the
business of producing pharmaceuticals for human consumption.
Raw Materials
The active chemical ingredients and other materials and supplies used in
the Company's pharmaceutical manufacturing operations are generally available
and purchased from many different foreign and domestic suppliers. However, in
some cases, the raw materials needed by the Company to manufacture
pharmaceutical products are available from a single FDA-approved supplier. Even
where more than one supplier exists, the Company may elect to list and in some
cases has only listed one supplier in its applications with the FDA. New
suppliers of the active ingredients in drugs must be approved by the FDA.
Accordingly, in the event of an interruption, any change in a supplier not
previously approved requires FDA approval, which may take several months.
In addition, recent and pending regulatory actions may make it more
difficult for the Company and other generic pharmaceutical manufacturers to
obtain commitments from foreign suppliers for raw materials prior to the
expiration of patents on branded products. The unavailability of such raw
materials could also impede the Company in its efforts to develop and obtain FDA
approval to manufacture and market new generic pharmaceutical products.
Regulation
The Company's operations are subject to regulation under the Federal Food,
Drug and Cosmetic Act, pursuant to which government standards as to "good
manufacturing practice", product content, purity, labeling, effectiveness and
record keeping (among other things) must be observed. In this regard, the FDA
has extensive regulatory powers over the activities of pharmaceutical
manufacturers including the power to seize and prohibit the sale of noncomplying
products and to halt operations of noncomplying manufacturers.
In addition to the extensive regulation the Company faces under the Federal
Food, Drug and Cosmetic Act, other regulations have also affected the generic
approval process. In June 1995, the Uruguay Round Agreements Act ("URAA") took
effect which extended patent terms pursuant to the General Agreements on Tariffs
and Trade. The extension of patent terms has delayed and is expected to continue
to delay the introduction of generic products by the Company.
While URAA has already extended patent terms, the brand companies have
further delayed the approval of new generic products by filing patent
infringement suits under the Hatch-Waxman Act. The Company upon filing
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an ANDA with the FDA must make one of five certifications with respect to
innovator patents. If the company certifies that its generic product is not
infringing or that a patent is invalid, the patentee can file suit. Brand
companies now use this certification process to prevent generic companies from
introducing competing generic products by bringing suit for alleged patent
infringement. Once a suit is filed, the FDA is prohibited from approving the
ANDA for thirty months or until the suit is litigated or settled. Along with
delaying the approval of generic products, the cost of bringing a new generic
product to market has risen substantially as the number of these suits and the
cost of defending them continues to increase. All such suits settled to date
have been on terms favorable to the Company. However, until the laws are
changed, the Company expects this type of suit will continue since it has proven
a very effective way for brand companies to delay generic competition.
The Company is subject to inspection and regulation under other federal and
state legislation relating to drugs, narcotics and alcohol. Many of its
suppliers and customers, as well as the drug industry in general, are subject to
the same or similar governmental regulations. The Company also is subject to
various federal, state, and local environmental protection laws and regulations.
Compliance with current environmental protection laws and regulations has not
had a material effect on the earnings, cash flow or competitive position of the
Company.
It is impossible for the Company to predict the extent to which its
operations will be affected under the regulations discussed above or any new
regulations which may be adopted by regulatory agencies.
Employees
The Company employs approximately 2,100 persons, approximately 1,050 of
whom serve in clerical, sales and management capacities. The remaining are
engaged in production and maintenance activities.
The production and maintenance employees at the Company's manufacturing
facilities in Morgantown, West Virginia, are represented by the Oil, Chemical
and Atomic Workers International Union (AFL-CIO) and its Local Union 8-957 under
a contract which expires April 5, 2002.
Backlog
At March 31, 1999, the uncompleted portion of the Company's backlog of
orders was approximately $7,388,000 as compared to approximately $19,899,000 at
March 31, 1998 and $10,410,000 at March 31, 1997. Because of the relatively
short lead time required in filling orders for its products, the Company does
not believe these backlog amounts bear a significant relationship to sales or
income for any full twelve-month period.
Item 2. Properties
The Company operates from various facilities in the United States and
Puerto Rico which have an aggregate of approximately 1,281,000 square feet.
Mylan Pharmaceuticals Inc. owns production, warehouse, laboratory and
office facilities in three buildings in Morgantown, West Virginia containing
473,000 square feet. Mylan Pharmaceuticals operates two distribution centers: a
166,000 square foot center in Greensboro, North Carolina which it owns and a
38,000 square foot center in Reno, Nevada which it operates under a lease
expiring in 2002. A new sales and administration facility containing
approximately 65,000 square feet and an additional production area of
approximately 11,000 square feet are currently under construction in Morgantown,
West Virginia.
Mylan Inc. owns a production and office facility in Caguas, Puerto Rico
containing 115,000 square feet and a production facility in Cidra, Puerto Rico
containing 32,000 square feet.
Bertek Pharmaceuticals, Inc. owns production, warehouse and office
facilities in two buildings in Sugar Land, Texas containing 70,000 square feet.
Mylan Technologies Inc. owns production, warehouse, laboratory, and office
facilities in three buildings in Swanton and St. Albans, Vermont containing
118,000 square feet. Mylan Technologies Inc. also operates a coating and
extrusion facility in St. Albans containing 71,000 square feet under a lease
expiring in 2015.
UDL Laboratories Inc. owns production, laboratory, warehouse, and office
facilities in three buildings in Rockford, Illinois and Largo, Florida
containing 123,000 square feet. UDL also leases a warehouse facility in Rockford
containing 41,000 square feet under a lease expiring in 2005.
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Penederm Inc. maintains administrative and research and development
facilities in two buildings in Foster City, California containing 27,000 square
feet under leases expiring in 2003.
The Company's production equipment includes that equipment necessary to
produce and package tablet, capsule, aerosol, liquid, transdermal and powder
dosage forms. The Company maintains seven analytical testing laboratories for
quality control.
The Company's production facilities are operated primarily on a two-shift
basis. Properties and equipment are well maintained and adequate for present
operations.
The Company's corporate offices, approximately 7,000 square feet, are
located at 1030 Century Building, 130 Seventh Street, Pittsburgh, Pennsylvania,
and are occupied under a lease expiring in 2000.
Item 3. Legal Proceedings
In August 1997, Key Pharmaceuticals filed suit in the United States
District Court for the Western District of Pennsylvania against the Company and
certain subsidiaries alleging patent infringement relating to the marketing of
its nitroglycerin transdermal system. The relief sought included a preliminary
and permanent injunction, treble damages along with interest and attorney's fees
and expenses. All claims and counterclaims were dismissed during fiscal 1999
pursuant to a settlement between the companies. The Company continues to
manufacture and market its nitroglycerin transdermal system in accordance with
the settlement.
In March 1999, a subsidiary of the Company entered into binding
arbitration related to a dispute with KaiGai Pharmaceutical, Co., Ltd.
("KaiGai"). The dispute arose out of a license and supply agreement for
nitroglycerin transdermal patches that both companies have asserted has been
breached by the other party. KaiGai seeks damages in excess of $20,000,000. The
Company believes the action against it is without merit and intends to
vigorously defend its position.
In June 1998, the Company filed suit in the Los Angeles Superior Court
against VivoRx Inc. ("VI"), VivoRx Diabetes, Inc. ("VDI") and certain directors.
The Company's suit alleges the defendants have been guilty of fraud,
mismanagement, abuse of authority, unfairness to the Company and other
shareholders and have wasted and misapplied the property of VI and VDI. In March
1999, VI, VDI and certain directors filed an answer to and cross-complaint in
Los Angeles Superior Court against the Company. The cross-complaint alleges
negligence, misrepresentation, fraud, breach of contract, and tortuous
inducement of breach of fiduciary duty. The suit seeks unspecified compensatory
and punitive damages. With respect to the cross-complaint the Company believes
the suit is without merit and intends to vigorously defend its position.
Upon motions made by the Company, certain disputes relating to the
exclusive licensing agreement between VI, VDI and the Company were referred to a
separate arbitration proceeding to be conducted under the auspices of the
American Arbitration Association. Such proceeding concluded in April 1999 and on
May 18, 1999, the Company received notice of the arbitrator's decision.
Under the terms of the arbitration award, the Company is required to fund
approximately $10 million for research and development performed by VI
subsequent to March 31, 1998. In turn, the Company was permitted, at its
election, either to (1) continue in effect and continue funding the exclusive
licensing agreement between the parties, or (2)terminate its rights under the
agreement and receive payment from VI of approximately $18 million, representing
50% of the amounts it has funded for research and development to date (including
the $10 million discussed above). The Company elected to terminate the agreement
and, therefore, VI must pay to it the amounts due, plus interest, in five annual
installments commencing October 1, 2000. This obligation is to be secured by a
security interest in VI's diabetes-related U.S. patents.
As a result of this award, the Company recorded the effects of the $10
million funding obligation discussed above in its fiscal 1999 financial
statements as research and development expense. The $18 million required to be
paid by VivoRx will be recognized as income when realized.
Various other disputes between the Company and VI, VDI and other parties
remain the subject of on-going litigation. While it is not feasible to
7
predict the ultimate outcome of this litigation, it is the opinion of management
that the ultimate outcome will not have a material adverse effect on the
Company's operations or its financial position.
In May 1998, Genpharm Inc. filed in the general division of Ontario
Court, Canada, a statement of claim against Novopharm Limited and Granutec, Inc.
("Novopharm"). The claim was filed to resolve contract interpretation issues and
collect additional funds due relating to an agreement between the parties for
the sale of ranitidine. In July 1998, Novopharm filed a counterclaim against
Genpharm and the Company seeking damages of up to $60,000,000. The Company was
named in the counterclaim due to its agreement with Genpharm in which it shared
in profits derived from the product ranitidine. The Company believes the
counterclaim is without merit and intends to vigorously to defend its position.
On December 22, 1998, the Federal Trade Commission ("FTC") filed suit in
federal district court for the District of Columbia against the Company. The
FTC's complaint alleges the Company engaged in restraint of trade,
monopolization, attempted monopolization and conspiracy to monopolize, arising
out of certain agreements involving the supply of raw materials used to
manufacture two drugs. The FTC also sued in the same case the foreign suppliers
of the raw materials, the supplier's parent company and its United States
distributor. Under the terms of the agreements related to these raw materials,
the Company has agreed to indemnify these parties.
The Company is a party to other suits involving the Attorneys General from
33 states and more than 20 putative class actions that allege the same conduct
alleged in the FTC suit as well as alleged violations of state consumer
protection laws. A qui tam action was commenced by a private party in the U.S.
District Court for the District of South Carolina proportedly on behalf of the
United States alleging violations of the False Claims Act and other statues. The
relief sought by the FTC includes an injunction barring the Company from
engaging in the challenged conduct, recision of certain agreements and
disgorgement in excess of $120,000,000. The states and private parties seek
similar relief, treble damages and attorneys' fees. In addition, a class action
suit was filed alleging violations of federal securities laws by the Company and
certain directors and officers of the Company.
Without specifying a dollar amount, the suit seeks compensatory damages.
Since the date of the filing of the Company's quarterly report of Form 10-Q
for the quarter ended December 31, 1998, there have been no material
developments in these proceedings except as described below. The Company has
filed motions to dismiss the FTC and State Attorneys' General cases as well as
the federal securities case filed in U.S. Federal District Court for the Western
District of Pennsylvania. The Company has also filed motions to dismiss five of
the suits commenced by private parties. In addition, two other private actions
have been dismissed.
The Company believes that it has meritorious defenses to the claims in all
FTC and related suits and intends to vigorously defend them. Although the
Company believes it has meritorious defenses to the claims, an adverse result in
these suits could have a material adverse effect on the Company's financial
position and results of its operations.
The Company is involved in various other legal proceedings that are
considered normal to its business. While it is not feasible to predict the
ultimate outcome of such proceedings, it is the opinion of management that the
outcome of these suits will not have a material adverse effect on the Company's
operations, financial position, or liquidity.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of the Company's executive officers are as
follows:
Milan Puskar 64 Chairman, Chief Executive Officer and
President
Dana G. Barnett 58 Executive Vice President
Louis J. DeBone 53 Senior Vice President
Roger L. Foster 52 Vice President and General Counsel
Roderick P. Jackson 59 Senior Vice President
Donald C. Schilling 49 Vice President-Finance
Patricia A. Sunseri 59 Vice President-Investor and
Public Relations
Robert W. Smiley 77 Secretary
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Mr. Puskar was employed by the Company from 1961 to 1972 and served in
various positions, including Secretary-Treasurer, Executive Vice President and a
member of the Board of Directors. From 1972 to 1975, Mr. Puskar served as Vice
President and General Manager of the Cincinnati division of ICN Pharmaceuticals
Inc. In addition, he has served as a partner in several pharmaceutical firms in
foreign countries and is currently a director of VivoRx, Inc., Santa Monica,
California; West Virginia University Foundation, Morgantown, West Virginia; and
Duquesne University, Pittsburgh, Pennsylvania. Mr. Puskar has served as
President of the Company since 1976 and as Vice Chairman of the Board since
1980. He was elected Chairman of the Board and Chief Executive Officer in
November 1993.
Mr. Barnett was employed by the Company in 1966. His responsibilities have
covered production, quality control and product development. Mr. Barnett became
Vice President in 1974, Senior Vice President in 1978 and Executive Vice
President in 1987. He was elected President and Chief Executive Officer of
Somerset in June 1991, and in August 1995, he was elevated to Chairman and Chief
Executive Officer.
Mr. DeBone has been employed by the Company since September 1987. Prior to
assuming his present position in May 1999, he served as Vice
President-Operations and Vice President-Quality Control. Since February 1997, he
has also served as President of Mylan Technologies Inc. He was previously
employed with the Company from March 1976 until June 1986 as Director of
Manufacturing.
Mr. Foster has been employed by the Company since May 1984. Prior to
assuming his present position in June 1995 as Vice President and General Counsel
he served as Director of Legal Services and as Director of Governmental Affairs.
Mr. Jackson has been employed by the Company since March 1986. Prior to
assuming his present position in October 1992 as Senior Vice President, he
served as Vice President-Marketing and Sales.
Mr. Donald C. Schilling has been employed by the Company since October
1997. Prior to assuming his present position as Vice President-Finance, he was
Vice President of Finance & Administration for Plastics Manufacturing Inc. in
Harrisburg, NC from 1991 to 1997.
Mrs. Sunseri has served as a Director of the Company since April 1997, as
Vice President-Investor and Public Relations of the Company since 1989 and as
Director of Investor Relations of the Company from 1984 to 1989.
Mr. Smiley has been the Secretary and a member of the Board of
Directors of the Company for over 23 years. He joined the law firm of Doepken
Keevican & Weiss Professional Corporation in October, 1992, which law firm
provided legal services to the Company in fiscal 1999. Previously, he was a
partner of Smiley, McGinty & Steger for more than five years.
No family relationships exist between any of the above executive
officers. Officers of the Company serve at the pleasure of the Board of
Directors.
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters
The information required by Item 5 is hereby incorporated by reference to
pp. 21 and 49 of the accompanying Annual Report to Shareholders for the year
ended March 31, 1999.
Item 6. Selected Financial Data
The information required by Item 6 is hereby incorporated by reference to
p. 21 of the accompanying Annual Report to Shareholders for the year ended March
31, 1999.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
9
The information required by Item 7 is hereby incorporated by reference to
pp. 22-29 of the accompanying Annual Report to Shareholders for the year ended
March 31, 1999.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk The
information required by Item 7A is hereby incorporated by reference to p. 28 of
the accompanying Annual Report to Shareholders for the year ended March 31,
1999. Item 8. Financial Statements and Supplementary Data The information
required by Item 8 is hereby incorporated by reference to pp.
30-49 of the accompanying Annual Report to Shareholders for the year ended March
31, 1999.
Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information as to directors required by Item 10 is hereby incorporated
by reference to pp. 2 and 3 of the Company's 1999 Proxy Statement. Information
concerning executive officers is provided in PART I of this report under the
caption "Executive Officers of the Registrant".
Item 11. Executive Compensation
The information required by Item 11 is hereby incorporated by reference to
pp. 8-10 of the Company's 1999 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management The
information required by Item 12 is hereby incorporated by reference topp. 4 and
5 of the Company's 1999 Proxy Statement.
Item 13. Certain Relationships and Related Transactions
The information required by Item 13 is hereby incorporated by reference to
p. 2 of the Company's 1999 Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. List of Financial Statements
Annual Report
Page
Number
INCLUDED IN ANNUAL REPORT TO SHAREHOLDERS:
Consolidated Balance Sheets.............................. 30-31
Consolidated Statements of Earnings...................... 32
Consolidated Statements of Shareholders' Equity and
Comprehensive Earnings................................. 33
Consolidated Statements of Cash Flows.................... 34-35
Notes to Consolidated Financial Statements............... 36-48
Independent Auditors' Report............................. 48
2. Financial Statement Schedules
The information required by this Item is incorporated herein
by reference to Exhibit 99. All other schedules have been
omitted because they are not required or the information can
be derived from the Consolidated Financial Statements
included in the accompanying Annual Report to Shareholders
for the year ended March 31, 1999.
3. Exhibits
(3)(a) Amended and Restated Articles of Incorporation of the
registrant, filed by the Company as Exhibit 4.2 to the
Form S-8 on December 23, 1997 (registration number
333-43081) and incorporated herein by reference.
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(b) By-laws of the registrant, as amended to date, filed by
the Company as Exhibit 4.3 to the Form S-8 on December
23, 1997 (registration number 333-43081) and
incorporated herein by reference.
(4)(a) Rights Agreement dated as of August 22, 1996, between
the Company and American Stock Transfer & Trust Co.,
filed as Exhibit 4.1 to Form 8-K dated August 30, 1996
and incorporated herein by reference.
(10)(a)Mylan Laboratories Inc. 1986 Incentive Stock Option Plan,
as amended to date, filed as Exhibit 10(b) to Form 10-K
for fiscal year ended March 31, 1993 and incorporated
herein by reference.
(b) "Salary Continuation Plan" with Milan Puskar, Dana G.
Barnett and C.B. Todd each dated January 27, 1995 and
filed as Exhibit 10(b) to Form 10-K for fiscal year
ended March 31, 1995 and incorporated herein by
reference.
(c) "Salary Continuation Plan" with Louis J. DeBone dated
March 14, 1995 filed as Exhibit 10(c) to Form 10-K for
fiscal year ended March 31, 1995 and incorporated herein
by reference.
(d) Employment contract with Milan Puskar dated April 28,
1983, as amended to date, filed as Exhibit 10(e) to Form
10-K for fiscal year ended March 31, 1993 and
incorporated herein by reference.
(e) Split Dollar Life Insurance Arrangement with McKnight
Irrevocable Trust filed as Exhibit 10(g) to Form 10-K
for fiscal year ended March 31, 1994 and incorporated
herein by reference.
(f) "Service Benefit Agreement" with Laurence S. DeLynn,
John C. Gaisford, M.D., and Robert W. Smiley, Esq. each
dated January 27, 1995 and filed as Exhibit 10(g) to
Form 10-K for fiscal year ended March 31, 1995 and
incorporated herein by reference.
(g) Split Dollar Life Insurance Arrangement with Milan
Puskar
Irrevocable Trust filed as Exhibit 10(h) to Form 10-K
for the fiscal year ended March 31, 1996 and
incorporated herein by reference.
(h) Split Dollar Life Insurance Arrangement with the Todd
Family Irrevocable Trust filed as Exhibit 10(i) to Form
10-K for the fiscal year ended March 31, 1997 and
incorporated herein by reference.
(i) Split Dollar Life Insurance Arrangement with the Dana G.
Barnett Irrevocable Family Trust filed as Exhibit 10(j)
to Form 10-K for the fiscal year ended March 31, 1997
and incorporated herein by reference.
(j) "Salary Continuation Plan" with Patricia Sunseri dated
March 14, 1995 filed as Exhibit 10(k) to Form 10-K for
the fiscal year ended March 31, 1997 and incorporated
herein by reference.
(k) Mylan Laboratories Inc. 1997 Incentive Stock
Option Plan filed as Annex A to the 1998 Proxy
Statement and incorporated herein by reference.
(l) Mylan Laboratories Inc. 1992 Nonemployee Director
Stock Option Plan, as amended to date, filed as
Exhibit 10(l) to Form 10-K for the fiscal year
ended March 31, 1998 and incorporated herein by
reference.
(m) "Salary Continuation Plan" with Roderick P. Jackson
dated March 14, 1995 and Amendment No. 1 dated April 1,
1999, filed herewith.
(13) Fiscal 1999 Annual Report to Shareholders which, except
for those portions incorporated by reference, is
furnished solely for the information of the Securities
and Exchange Commission and is not deemed to be
"filed".
(21) Subsidiaries of the registrant, filed herewith.
(23) Consents of Independent Auditors, filed herewith.
(27) Financial Data Schedule, filed herewith.
(99) Consolidated financial statements of Somerset
Pharmaceuticals, Inc. for years ended December 31, 1998,
1997, and 1996, filed herewith.
(b) Reports on Form 8-K
The Company was not required to file a report on Form
8-K during the quarter ended March 31, 1999.
11
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: June 23, 1999
by /S/ MILAN PUSKAR
Milan Puskar
Chairman, Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/S/ MILAN PUSKAR June 23, 1999 /S/ DANA G. BARNETT June 23, 1999
- - ------------------------ ---------------------------
Milan Puskar Dana G. Barnett
Chairman, Chief Executive Officer and President Executive Vice President
(Principal executive officer) and Director
/S/ LAURENCE S. DELYNN June 23, 1999 /S/ ROBERT W. SMILEY June 23, 1999
- - ------------------------ ---------------------------
Laurence S. DeLynn Robert W. Smiley
Director Secretary and Director
/S/PATRICIA A. SUNSERI June 23, 1999 /S/JOHN C. GAISFORD,M.D. June 23, 1999
- - ------------------------ ---------------------------
Patricia A. Sunseri John C. Gaisford,M.D.
Vice President and Director Director
/S/ C.B. TODD June 23, 1999 /S/ DONALD C. SCHILLING June 23, 1999
- - ------------------------ ---------------------------
C.B. Todd Donald C. Schilling
Director Vice President-Finance
(Principal financial officer)
/S/ Frank A. DeGeorge June 23, 1999
---------------------------
Frank A. DeGeorge
Director of Corporate Finance
(Principal accounting officer)