Shares of Mylan N.V. (MYL  - Free Report) have lost almost 19.4% in the year so far thereby underperforming the 4.5% increase registered by the industry during this period. Here we analyze the factors that led to the underperformance.

Mylan, a global pharmaceutical company has a well-established generics business and is known for specialty pharmaceuticals products.

We note that Mylan has been under immense pressure since August 2016 when the company faced severe criticism from lawmakers, consumers and the common people alike for a price increase of EpiPen since its acquisition of the drug in 2007. Further, Mylan made it to the headlines for wrongly classifying EpiPen as a generic product in the Medicaid Drug Rebate Program. The misclassification implied that Mylan has been vastly underpaying rebates to Medicaid for the drug for a long time than it would have if the drug was classified as a branded one.

The company recently signed an agreement with the U.S. Department of Justice and two other relators which finalize the Medicaid drug rebate settlement worth $465 million, announced in Oct 2016.

Sales from EpiPen continue to decline due to increased competition and the impact of the launch of the authorized generic. Adamis Pharmaceuticals recently received FDA nod for Symjepi, a generic version of EpiPen. EpiPen will represent less than 5% of global revenues and less than 10% of sales in North America in 2017.

The company’s efforts to get the generic version of GlaxoSmithKline plc’s (GSK - Free Report) asthma drug Advair Diskus suffered a blow when the FDA issued a complete response letter to its ANDA for the generic version. Although the company did not mention the contents of the CRL such setbacks are likely to weigh on shares.

Moreover, the FDA recently accepted Novartis AG (NVS  - Free Report) Sandoz's ANDA for Advair. A potential approval will give Sandoz the edge over Mylan. Moreover, the company believes that approval delays will persist in 2017 thereby impacting business further. The company believes that increased competition resulting from FDA's focus on accelerating the approvals of third, fourth or fifth generics will impact sales.

Meanwhile, Mylan’s second-quarter results were dismal as the company missed on both earnings and sales estimates due to challenges in North America. The cut in annual guidance was also disappointing. Mylan now expects revenues of $11.5-$12.5 billion in 2017, down from the earlier projection of $12.25-$13.75 billion.

The company now projects earnings per share in the range of $4.30-$4.70, down from the previously projected range of $5.15-$5.55. The guidance was lowered due to expected delays in the timing of certain key new product launches.

2017 will be challenging for the company due to volatility and uncertainty in the world's largest pharmaceutical market — the U.S. due to pressure from both accelerated new approvals on the company’s existing generic products and continued consolidation of the customer base. Contributions from new product launches in the U.S. were one of the lowest in the second quarter. The company also saw increased competition for its existing generic products, as FDA approves more generics through accelerated approvals.