Mylan's (MYL) CEO Heather Bresch Hosts Q4 2016 Earnings Call and Investor Day (Transcript)

Mylan NV (MYL) Q4 2016 Earnings Call and Investor Day March 1, 2017 1:00 PM ET

Executives

Kris King - Head of IR
Heather Bresch - CEO
Rajiv Malik - President
Ken Parks - CFO
Tony Mauro - Chief Commercial Officer
Haribabu Bodepudi - COO
Sanjeev Sethi - Chief Scientific Officer
Arnd Annweiler - R&D
Rakesh Bamzai - India & Emerging Markets
Jose Cotarelo - Japan, Australia & New Zealand
Matt Erick - North America
Jacek Glinka - Europe
Adele Gulfo - Commercial Development
Peter McCormick - Oral Solid Dose Operations
Andrea Miller - Biologics Operations
Deb O'Brien - Corporate Brand
Walt Owens - Respirator & Dermatologics Operations
Carmen Shepard - Quality

Analysts

Marc Goodman - UBS
Randall Stanicky - RBC Capital Markets
Elliot Wilbur - Needham & Company
Chris Schott - JPMorgan
Hima Inguva - BofA Merrill Lynch
Jami Rubin - Goldman Sachs
Liav Abraham - Citigroup
Sumant Kulkarni - BofA Merrill Lynch
Umer Raffat - Evercore ISI
Doug Tsao - Barclays Capital
Erica Kazlow - Bernstein
Brittany Chen - Barclays Capital
Tim Chiang - BTIG
Andrew Finkelstein - Susquehanna

Operator

Ladies and gentlemen, please welcome Head of Investor Operations, Kris King.

Kris King

Hello, everyone. It is good to see everybody again. It has been a while, since August of 2013 so we are glad you could make it today on a rainy day in New York City. It is my pleasure to welcome everyone in the room as well as those that are on the webcast or dialing in via telephone.

We have a very exciting day for you today. We hope you enjoy it as much as we think you will. We have got a full lineup of our leadership team; we have several hours of prepared remarks and we will save time at the end for roughly an hour of Q&A. And with that I do have to keep my i's dotted and my t's crossed, so bear with me while I read you our forward-looking statement.

During Investor Day we will be making forward-looking statements on a number of matters including our financial outlook and 2017 guidance. These forward-looking statement are subject to risks and uncertainties that could cause future results or events to differ materially from today's projections. More information about our forward-looking statements and the limits applicable to them can be found on the slide displayed behind me now, which is also available where this presentation is posted on our webcast.

In addition, we will be referring to certain actual and projected financial metrics of Mylan on an adjusted basis which are non-GAAP Financial measures. We will refer to these measures as adjusted and present them in order to supplement your understanding and assessment of our financial performance.

Non-GAAP measures should not be considered a substitute for or a superior financial measure to calculated in accordance with GAAP. The most directly comparable GAAP measures as well as reconciliations of the adjusted non-GAAP measures to those GAAP measures are available in our fourth quarter and fiscal year end 2016 earnings release and the appendix to this slide.

Let me also remind you, as you have also heard, the information discussed during the presentation, with the exception of the participant questions, is the property of Mylan and cannot be recorded or rebroadcast without Mylan's express written permission. An archived copy of today's presentation will be available on our website and today's slide presentation in totality will be posted at the conclusion of today's event.

So with that it is my extreme pleasure to welcome our CEO, Heather Bresch.

Heather Bresch

Thank you, Kris. Well, good afternoon, everyone. As Kris said, it is been since August of 2013 since we held an Investor Day and not truly by design. But as many of you know, there has been a lot of activity since August of 2013 and we couldn't be more excited to share with you who we are today. And we believe that there has been a lot of transformation since we were last together, both from our differentiated and diversified platform. And we believe there has probably never been a better time for not only as to tell our story about who we are today, but more importantly where we are headed tomorrow. And hopefully you will enjoy today, we have got a lot of leadership here with us, many will be speaking and then all of us will be joining you for cocktails afterwards. So I look forward to all of your questions once we get through our presentations. And like I said, I truly hope that it is a great reflection of not only who we are today but where we are headed.

So, I will start with just what we always say it comes, what we are grounded in which is our mission statement. And we truly have been committed to setting new standards and providing access to high quality medicine for the world's 7 billion people. And I hope what you see today shows that our words actions speak louder than words. And it really is about serving the developed markets as well as the developing markets as well as the developing markets. And serving the HIV population and breaking down barriers to access. It's who we are and it is what motivates us. We have been committed; we have had a long-standing [committed] to both access and innovation. And while we have the traditional innovation in R&D with 3,000 scientific affairs, over 4,200 active patents, we have spent a tremendous amount in research and development and I am excited to give you that update today as well from biologics, our generic Advair.

But we also innovate through unconventional means which is breaking down barriers to access to make sure that the people who need our medicine can get it whether it is in sub-Saharan Africa or here in the United States. Our team of over 35,000 employees truly believes that this is what we get up every day to do. It is important work and we work hard to get it right.

And as we know, there is a lot of volatility in the world today, a lot of things happening around us. But what we do know is the world needs access to high-quality medicine and we believe that we are best positioned to deliver on that mission.

So just a quick look back at the last now almost decade. When you think about our commitment not only to this track record, but more importantly the assets that we have pulled together over these last 10 years, starting with the Merck/Matrix acquisition, both were very transformative, Matrix really leapfrogging us into the API space and the vertical integration, while Merck took us from being a domestic Company to a global one truly overnight.

From there obviously was a very challenging environment. The financial markets were crashing around us. And to say that we had our headwinds I think would be an understatement for those of you that have been with us since 2008.

But as many of you know, not only did we continue to execute through that time, we continued to invest. And we continue to invest in important areas that are a byproduct of the success we are enjoying today and the growth and opportunity in front of us.

So hopefully what this demonstrates and what you are going to hear a lot of today since 2013 from Agila to Abbott to Meda to Renaissance to Famy Care to launching Hertraz in India back in 2014, we have now launched that in a dozen other countries. A lot of exciting not only opportunities but these assets.

We have had a long-standing -- a long-standing commitment to it is not just about what the Fed is doing or the Company is doing on their own, it's what we have always truly believed that we could do together. That has been about how we bring the people together from these companies, how we bring the assets together and how we optimize them.

And again, you are going to hear a lot today about how we are approaching integration, what that means for Mylan, and more importantly what it means about how we are running our business going forward.

So if you look at who we are today, we believe a very unique and differentiated profile serving over 165 countries, $11 billion in revenue, 68 billion doses sold. We have $700 million spent last year in R&D, our 35,000 global workforce, 7,500 products and, as I mentioned, 4,200 active patents.

Hopefully that shows you -- I always say a picture can say 1,000 words. This picture is not just again about size, because a lot of people can have a lot of assets. It is how we leverage and optimize these assets, how our scientists, how our manufacturing, our operation excellence comes together with our commercial excellence and how that we truly leverage in every country we operate.

Because every country has got a unique profile. Every country has different needs; every country has a different way that you have got to go to market. And what we believe we now have are the assets, the products and the different channels with the right people and expertise to truly leverage the best go-to-market strategy in each and every country that we operate in.

And when you think about where we are headed as a society, the growing global demand for medicine, I mean it certainly is not – the trend is not going the other direction. The trajectory for the population growth, the over 65, the spend and the doses that are going to be needed to take care of the population is certainly a demand that not many companies can fulfill.

When you think about the infrastructure both from an operating and a commercial perspective to deliver this kind of volume to this many patients, that infrastructure is where we believe that we’ve got one of the best not only platforms, but the best execution to deliver on our promise and commitment.

When you look at our global presence today to meet this demand, today we stand number six worldwide. That’s both Rx for prescription volume overall both brand and generics, Mylan is number six worldwide about 2% market share and again in over 165 countries. So the volume that we’ve been able to not only both through organic and inorganic, but the dosage forms and as we said, it is not just about high volumes or a lot of assets, it’s how we are leveraging complex dosage forms both from oral solids to transdermals, to injectables, how we are able to deliver this medicine in the most effective and cost efficient way.

When you look at some of the stats just throughout that we’ll obviously be taking a deeper dive into today, but from being number two in the U.S. to number one in France, number two in Italy, you are going to hear a lot. Our transformation in Europe has been significant.

The assets that we’ve pulled together have positioned us to truly, truly get our disproportionate share of growth. We see tremendous opportunity when you just think of generic utilization where we stand today in the United States with almost 90%. Most other countries are far behind that and offer a huge opportunity not only to capture the utilization to go up but our market share within these markets that we are competing.

And on our theme of just highlighting this diversification and just since we met last in 2013, if you look at by geographies, our North America, our Europe, our rest of world segment certainly has continued to become more balanced as well as our revenue by channel. You look in 2013, the predominant matrix being generics and today that blend between both Gx, Rx and OTC, again, we believe it gives us a real unique opportunity and how we go to market, how we commercialize, how we mean the most to our customers around the world. And there’s a lot of them. That meeting that global demand, meaning the most to the customer as well being meaningful to the patient is what we believe we have now been able to put the right infrastructure in place to do just that.

And as we talk about today’s discussion, I couldn’t be more excited to introduce not only our leadership team, but really everything that we’ve pulled together and how we are driving and managing this Company, how we are managing the countries that we are operating in, how we are delivering truly on our mission of delivering to the world 7 billion people. We are going to talk about the global trends and our ability to leverage this opportunity, our unmatched operating platform, partner of choice to reach 7 billion. We have also done a lot of strategic partnerships that have allowed us to, again, how we go to market in any individual country; we take a lot of time to think about that. Japan is a great example; you are going to hear more about Japan today.

But our partnership with Pfizer, going to market, leveraging both strengths of both companies from the Pfizer brand and their infrastructure to our operating platform, our portfolio and our pipeline and bringing those both together catapult us to a leadership position in Japan in a very short period of time. Financial performance and then, as Kris mentioned, Q&A.

So before I introduce and have the management team introduce themselves I would like to, I know we have shown some videos in the past, and you are going to see some more today on our operational excellence and where we have come both with biologics in insulin and generic Advair. But I thought it would be good to highlight a short video that truly shows you that we are so much more than one product and in so much more than one market that it really hopefully emphasizes who we are today and how many products and people make up the Company of Mylan.

[Audio/Video Presentation]

So again just a little teaser. Hopefully you saw some of the Mylan store as you came in, but a lot of exciting products, a lot of exciting opportunities. And most importantly, exciting about how we are pulling it together in what we call a One Mylan strategy and really leveraging all of these assets and approaching our customers and our patients with one voice with this complement of products.

So with that I would like to highlight what we always say is our best asset, which are our people. And I think sometimes something that is overlooked or perhaps not discussed but is that truly special sauce that what we believe is part of our differentiator, it is the continuity of our management.

I have been with Mylan 25 years, my fifth year as CEO. And truly have been able to not only grow with Mylan, this industry, evolve now into this global Company with 35,000 colleagues. And truly understand what the fabric of what we do every day and what it means. And when I think about just between myself, Rajiv and Tony, we have got 75 years in this industry, the majority of those, over 55 of those years at Mylan together.

And just if you look over the last decade and as our leaders introduce themselves hopefully you will get a feel that many of us have been together for a long time. We have been part of the Matrix/Merck/Mylan coming together back in 2007. And part of truly, as we say integrating Mylan, bringing together assets, not just transactions. It's not just about buying a product or a company it is really about bringing two organizations together and getting the best out of them.

And we believe that that is what we have done and that is what we will continue to do as we now bring great assets into this infrastructure. So with that I would like to ask some of our management team representing our 35,000 to stand up in the front row and just turn around and take the opportunity to introduce themselves to you. Rajiv?

Rajiv Malik

Good afternoon, everybody. I'm Rajiv Malik, I serve in the role of President. I have been in this business for 35 years it is my 35th year and 10th year with Mylan. So proud to be part of this member. I do my bit with Heather, our Chairman Robert and Board to define the strategy. But then I quickly step back to do what we do best is to execute with this wonderful team. And thanks to good to have you here.

Ken Parks

Good afternoon, I am Ken Parks, probably the newest member of the team. I joined Mylan in June of 2016. And I am the Chief Financial Officer. And I have the pleasure to be joining the industry. I spent about 25 years in companies, United Technologies and Wesco, which are in the industrial space, and have great partners to move along this next phase of the path with Mylan.

Tony Mauro

Good afternoon, my name is Tony Mauro and I have the great privilege of being Mylan's Chief Commercial Officer. I just started my 22nd year here with Mylan and I am very proud of where it has grown and watching it transform and diversify from one country to 165 countries around the world. So look forward to today. Thank you.

Haribabu Bodepudi

Good afternoon, I am Haribabu, Chief Operating Officer. Last 11 years I have been working with Mylan. So I have a total of 25 years experience, worked in R&D quality operations. Thank you.

Sanjeev Sethi

Good afternoon, I am Sanjeev Sethi, I am Chief Scientific Officer for Mylan. I have been in the industry for almost now 28 years and I came to Mylan through Matrix acquisition in 2006. A really great exciting journey of 11 years in Mylan and I am really proud of the scientific affairs management team. We are very hands on and we diligently track every submission and every launch. And we're glad to be here today. Thank you.

Arnd Annweiler

Good afternoon, everyone. My name is Arnd Annweiler, I am Head of R&D. I joined Mylan about 2015, and 25 years in the industry. And prior to my role here in Mylan I was head of R&D for Abbott's established pharmaceutical business. So I am probably the second newest member behind Ken here in the team. But I bring a lot of experience from the previous products. And what I've got to say, when I joined Mylan what I was really impressed with is the breadth and the depth of the science and the capabilities that my new team here really has to offer. So looking very much forward to meeting all of you today. Thank you.

Rakesh Bamzai

Hello, my name is Rakesh Bamzai. I have responsibility for India and emerging markets. I have around 23.5 years of experience in pharmaceutical business. And this role that I have, this responsibility I have here, I in Mylan for more than three years now. Me and my team are extremely excited and committed to see the portfolio coming together, the infrastructure coming together, enhancing access every single day, reaching those 5.5 billion people that live in my geographies. I will be happy to talk to you later during the day. Thank you for coming.

Jose Cotarelo

Good afternoon, everyone, I am Jose Cotarelo; I head up our commercial businesses in Japan, Australia and New Zealand. I am coming up on my eighth year at Mylan. Previous to Mylan I was with Merrill Lynch for many years. And could not be more proud of the evolution of the Company, the transformation since I have been at Mylan. And even as I met Mylan many years before me actually joining and very excited about our opportunities ahead.

Matt Erick

Hi, I am Matt Erick; I have the honor of heading up our North America business. I have been at Mylan now eight years and I have been in the industry over 20 years primarily in retail, wholesaling and now manufacturing. Thanks for coming today.

Jacek Glinka

Good morning, my name is Jacek Glinka; I joined Mylan three years ago to head the European business. And I will be sharing some slides on the Europe to you later on. So this is my first Investor Day, hopefully not the last one. Thank you for coming and I hope you will enjoy.

Adele Gulfo

Good afternoon, everyone, I am Adele Gulfo; I have been with Mylan just over three years. Most of the time in the role as strategy officer. But in January I've taken on a new role to head up our global commercial development. And in that role I am very excited because it is an opportunity to ensure that all of our markets are optimally prepared to successfully launch and grow our pipeline assets and you will hear a lot more about that today.

Peter McCormick

Good afternoon, Peter McCormick. I lead Mylan's oral solid dose operations, some 24 manufacturing sites globally that underpin access to high-quality affordable medicines. I joined Mylan in 2007 with the Merck acquisition. I have some 22 years operations leadership experience having held numerous local, regional and global leadership roles working and living in Australia, Japan, Ireland and the United States. Thank you very much.

Andrea Miller

Good afternoon and welcome. I am Andrea Miller; I head our global biologics operations. I may be the old folk here; I have been with Mylan for 28 years. Most of my time and tenure at Mylan has been in R&D and regulatory affairs, focusing more actually on our brand drug research and we’ve involved in five of our NDAs. My past role was with our global complex products operations, but with -- as we are advancing and expanding our biologics portfolio, I have this past year focused on biologics only, and look forward to giving you an update on the exciting advancements we have made.

Deb O'Brien

Hello. Good afternoon. I am Deb O'Brien and I have the great honor to be Head of the Mylan corporate brand and digital operations. I have been with Mylan going on seven years and prior to that I spent most of my career with Novartis mostly in marketing and marketing capacity and finishing my career there heading up one of their growth drivers. I look forward to seeing you this afternoon and spending some time with you.

Walt Owens

Good afternoon, everybody, my name is Walt Owens. I head up our respiratory and derm operations. I've had the great pleasure of being with the organization now for 24 years, served in the roles of quality, R&D and really I am proud of the way we have progressed this all forward that you're going to see today. I'll be sharing with you some information around our respiratory programs later today and look forward to chatting with you.

Carmen Shepard

Good afternoon, my name is Carmen Shepard, I am heading quality here at Mylan, this is my fifth year. Prior to coming to Mylan I was in private practice helping a variety of pharma and device companies negotiate compliance, quality and other regulatory issues with FDA and other global regulatory agencies. Thank you for joining us today.

Heather Bresch

Please help me; I would love to give a round of applause to our leaders. I’d also like to thank our 35,000 around the globe because it's truly a team effort and it takes every single one of us. And there is likely some other Mylan leaders that are here as well that you will get to meet this evening.

And I guess I can't underscore enough, I didn't add up the years, but I am pretty sure somehow between us there is, what, 300 years to 400 years of experience. And as you have heard, a lot of it together. And it truly is that business continuity. I think the management and really owning and being accountable for the things and the transactions and the assets that we have acquired over the last 10 years. This wasn't about a hit and run, it truly been about how do we get the best. And we’ve been able to attract talent from these acquisitions and we’ve been able to then truly work together to maximize and optimize them. And like I said, I look forward to all the things that you're going to get to hear and learn and get updated on today on that front.

So if I just for a second -- you heard a lot about all of these assets. And like I said, it's not just about a lot of assets, it is really how we are organizing ourselves, how we are thinking about markets, how we are looking to see still where we have gaps and voids. And we believe this is a really good demonstration of just showing that its starts with of course these great assets. But we really have started thinking about in these therapeutic franchises. And as you're going to see, we serve a leadership role in many of them. And the breadth across these franchises, again, it's not just about products, it is we are thinking about the Rx channel, the generic channel, the OTC channel and you're going to hear a little bit about our Hx channel, healthcare solutions. So it's really about how we embrace and think about that patient in the center of healthcare.

As I've said before, including this country, a lot of us get, it is more sick care than it is healthcare. How do we start thinking about truly the wellness and preventative and taking care of patients from cradle to grave. And as we think about that holistic not only the products and how we are packaging them together, but the solutions that we are wrapping around them to truly bring more value and education to patients and physicians and healthcare providers around the world.

So as you think about this portfolio and we look at our products through this lens, it really gives another view to show that, again, so much more than one product, so much more than one therapeutic category. When you look at out our 10 therapeutic franchises we have 6 that are $1 billion or more. And these are with hundreds and hundreds of products, these aren't with one or two. These are with many, many products that go very deep and broad from dosage form delivery as well as the therapeutic category that we are treating. And with that being said, I know we came out in Q3 and said that we were going to be changing our segment reporting. And I know many of you have reported on this and said not quite sure what that was going to bring. Hopefully what you are going to see and what we are going to demonstrate today is it is going to bring more transparency.

Not only is it how we run and drive the business, how we are organized, but it truly is how we are thinking about our markets, thinking about these regions and how, as you are going to hear from Rajiv and Tony and Jacek, as we think about how do we bring to bear these products in the market. We are not running individual businesses in these countries. We are going to France and we are thinking about behind the counter, over-the-counter, how we are interfacing with the physician, how we are interfacing with the pharmacist and how we are interfacing with the patient.

So it is truly how we believe is the best way to not only show you what is happening around the world in these geographies, but it is how we are running and driving the businesses. And Meda truly was that turning point when you think about the OC products that we have now brought in, how we have truly transformed Europe, that this is a much better way to demonstrate our business. And I think if you take this look, again I think this picture says 1,000 words. When you look at from North America starting there, obviously we know North America, the United States is one of the most profitable countries. And you look at our CAGR both on top line as well as our profitability and it has been steady at around 50% and we have continued to grow very nicely throughout North America and our profit has kept pace.

But the real story and what has allowed us to be the diversified and differentiated Company we are today and absorb the volatility whether it is a year like 2016 in the United States or in some other part of the world, this differentiation, really looking at our business in these three parts is what has allowed us to absorb that volatility and manage through it.

You look at Europe, while we have had great growth on the top line, 41% CAGR, 127% on the profitability. When you think about that, our vertical integration, our horizontal integration, truly bringing together these assets, I mean these numbers again I think really tell a story of how we are continuing to not only do good but do well.

We are bringing great assets together strategically and complementary and we are getting the most out of them, how we are organized, our operating platform. And like I said, I think that the Europe has really been, really been not only transformed but, as Jacek said he has going to share an update on a couple of countries, about how not only where we are today but more importantly all the products we have coming in our pipeline and how we are going to be able to best maximize them through our infrastructure.

And then rest of world, again, 21% CAGR, 46% that growth in profitability. And as, this is where the tenders, how we approach our HIV business. I can't say that when you look across our sector and across many of our peers, not only are many not global and can find themselves when something, when there is volatility in a market being very confined and defined by that volatility. But there aren't many serving the developing world as the developed.

And you look at the products and the portfolio we have and our ability to not just sell them in United States in Europe, but our ability to sell them and distribute them throughout, like I said, Africa when you think of the tenders. And the opportunity for us to take what we have done really well and grown a great business and use that as a channel to now continue to sell these other assets. And that is really our opportunity from an expansion perspective in a lot of these emerging markets. So, I am going to just quickly hit our 2016 guidance and our actuals. Ken will be talking a little more in detail about the quarter. But, look, you take 2016, there couldn't have been I would say a more noisy, volatile year for healthcare, for pharmaceuticals here in the United States and for Mylan. I mean everything from EpiPen to the pricing discussions to healthcare.

And you look at our revenues, we came right at the middle of guidance. You look at our EPS we came in at the high end of our revised range, still within the range of our original our initial $4.85 to $5.15 and, like I said, at the high end from our revised at $4.70 to $4.90 all while generating tremendous free cash flow, almost $2.1 billion. So again, that ability, that strength to manage, to use the levers we have across the business to deliver both top line and bottom line. I think, like I said, not only speaks to the platform and the fact that now 50% of our business is outside of the United States to help us truly absorb that volatility and continue to show growth in many, many areas across many countries. But to be able to deliver and continue to maintain that strong balance sheet and financial flexibility. As we look towards 2017, again, I think as you look at top line, North America greater than 5% growth, Europe greater than 30%, rest of world greater than 20%. So again, great opportunity both from the acquisitions. You are going to hear about how Meda, Abbott we have really combined. As, that was mostly a story around Europe.

But again has given us such great infrastructure and assets that to complement this now, as we look at products and where we still have voids and gaps, like I said just see tremendous opportunity both from a generic utilization perspective as well as market share perspective. And if you look down from, again, generating significant free cash flow, a range between $2 billion and $2.4 billion, all while we continue to invest in our business. So and it doesn't stop with 2017. As we continue to reiterate our $6.00 target, when you look at this chart, and I know this has been a chart that we have been using since our first Investor Day back in 2012, and I know at the time many of you looked at that and said, geez, $6.00, how in the world are you going to get from here to there. And what I would say is I totally understand as you look at those early years it was a very we were a show me story. We had acquired a Company 2.5 times our size, like I said, in a very challenging environment at the time. But we delivered and we delivered and we delivered on those financial commitments. And as you look over these last several years, not only did we continue to deliver on these financial commitments but we were continuing to invest. So while we delivered on the short-term we were building this Company for the longer term, 5 billion in R&D, over 3 billion in CapEx, generating over $11 billion in free cash flow.

I mean, so we certainly weren't running or building this Company for the short-term or the returns. But I will tell you and I truly believe a well-run Company delivers tremendous shareholder value. And I think that that’s what we have been able to continue to show. And most excitedly we are still investing. You see our R&D spend last year, 700 million. This year we aren't pulling back and not investing. That organic investment is what has allowed the exciting opportunities you are going to get updated on today from Advair to our investment in biologics. When we came to this chart back in 2012 and then in 2013, we said biologics didn't even make up the $6. We weren't counting on launches or monetary return in this period of time. But we certainly have the investments in this.

So I think that again, a differentiator is that the building for the long-term, delivering on the short-term and like I said, with the business continuity that we have. And all of those great things, as you are going to hear today, is what's showing that growth beyond 2018. So our investments in biologics, insulins, these exciting products, expanding into these other markets, being able to leverage now the over 7,400 products that we have in the new markets is what really is going to get that growth beyond 2018. But certainly is providing the roadmap and like I said, you are going to hear a lot more today not only about 2017 but about 2018.

So with that I'd like to just turn for a couple of minutes to the dynamics here in the healthcare and then I am going to turn it over to the team to start walking you through the Mylan story. So I thought this quote probably summed it up best. I think we can all agree that healthcare is complicated. And I would at least say from my perspective the first stage in trying to address the problem as you have got to try to understand it. And I think that the discussion that has happened over the last six to nine months is at least an acknowledgment that it is complicated and very complex. And I would argue too complicated and too complex. And therein lies what needs to happen and what needs to change in a transformative way.

Just to ground us because, again, I think there has been a lot of discussion around generics. And I think sometimes what's got lost in that message is how much generics drive access and savings for the U.S. healthcare system. When you look at the spend, the amount that is spent on pharmaceuticals and then out of that 3% being generic drugs. However, that represents 89% of the doses are coming from generics as only 11% from the brand. And from a cost perspective the 89% worth of prescriptions is 27% of our healthcare cost.

So I would argue that in the generic space we are getting it right from a competitive perspective, a supply and demand perspective. But from an overall perspective I think what we know is that this isn't working in the healthcare environment we live in today. And the patients aren't reaping the same savings as our system has reaped over the years and that’s what needs to change. When you look at our role in the U.S. we filled one out of every 13 prescriptions brand or generic, that’s 22 billion doses last year, which is more than Pfizer, Glaxo, Sanofi, Astra, J&J, Merck and Lily combined. People don't when I share that stat they are like how I don't know Mylan, I haven't heard of Mylan and yet you are 1 out of 13 scripts. And again, I think therein lies our opportunity. This was our launching pad to tell our story about who we are, what we have become today and, importantly, the role we play in delivering affordable healthcare. And what access means and how we fight for that access.

And when you think about our 635 products across the United States, almost 10% of the market, it is a deflationary model. We have continued to model it as a deflationary model. Our business model has been about high volume, new product launches and delivering the most affordable effective medicine that we can into the healthcare system. That is what it has been about for over 55 years. We just continue to grow that scale and grow outside the United States. But we have not lost sight of the role we play and the need for that role in the system. I think that when you though think about where we are today and the inflection point for patients and payers, if I go back and again dating myself 25 years when I came into this industry, we had about 35% if not 40% cash paying patients, cash paying customers.

And there was a lot of discussion about cash paying customers and the fact that Medicare didn't have a prescription drug benefit. And there was a lot of discussion about how do we reduce that burden for the cash paying patient because the system, the prescription system wasn't it wasn't built for this consumer activity. So over the years, back in 2003 of course Medicare brought in Part D and a couple of years ago we were down to 1% or 2% of cash paying customers in this country. If you now look at what has happened over these last couple of years with high deductible plans, we have over 51% of Americans that are paying $1,000 or more out of pocket before really their insurance kicks in.

So all of a sudden, almost overnight, we are back to having over 50% of Americans look like cash paying customers again. They walk up to that pharmacy counter and they are being asked to absorb that full list price. And as you may remember, this is a chart I used on CNBC, I say it truly was an inflection point in and of itself, showing the difference between what the manufacturer captures of that list price and what happens throughout the middle. And this isn't about pointing fingers or blaming, it is about the fact that I realize what a significant lack of knowledge people had about the supply chain or the players in it, or the fact that there were any players between the manufacturer and the patient. So as you look at this system that is very much driven by institutions today, you see the patient at the end of the page. And it is a very linear vertical way that we get from the manufacturer to the patient and the fact that this list price is absorbing the entire supply chain.

The other dynamic is patients aren't isolated anymore. As I said, over 50% look like cash paying customers and so they are not getting the benefit or feeling the benefit of their plan. And as this is going to continue I don't think any of us would think that that is going to the other direction.

I don't think deductibles are going to come down; I think more and more there is going to be a cost shift to employees. And as that cost shift continues we are going to continue to put more people looking like cash paying customers, which is why we have got to really think about this in a transformative way. These incremental solutions that have been discussed, the legislative solutions that have been discussed I would argue are merely not even band aids for symptoms, they certainly aren't going to the problem and the issue, which is that we need to make consumers in the middle, this patient centric.

We shop for everything else in our economy. I would argue that the United States have the best shoppers in the world. We want the highest quality for the lowest cost and we demand that as consumers. We demand it in other parts of healthcare, over-the-counter medicine, you can walk in, you get to make a decision. Do you want the brand? Do you want the generic? What brand do you want? What are you looking for? You get to shop. And that ability to shop drives up quality and down price.

The prescription market doesn't work that way, it is not market-based in the true sense of supply and demand and consumer driven. And until we make it market-based where consumers can be informed -- we have got CEOs of households out there, moms out there that have no information, don't know how to shop, are being asked to spend significant healthcare dollars without any information.

So until we make not only greater transparency, that is one half of the equation. But the ability for market driven dynamics to really allow prescription medicine to work like every other part of our economy, we are not going to solve the issue, the problem of that patient walking up to the pharmacy counter and not benefiting from the savings that generics bring to the market nor benefit from the savings that robust, innovative, new medicines bring to the patient.

So I wanted to, like I said, share. It has been a very interesting year, a very dynamic year to say the least. I will look forward to your questions this afternoon. And until then I would love to turn it over -- my last slide, sorry, I got ahead of myself -- to just capture kind of all of this.

All of the diversity and differentiation that we have built over the last decade has really put us in a position to be a catalyst for change. And as I have said, if EpiPen was a window into a broken system and allow that to be a catalyst to change what needs to change here in the US, that Mylan's position to be that leader in many markets that we serve, how we are fighting for access for patients, how we are working with governments to decide how healthcare is delivered from emerging markets to the developed markets to growing utilization throughout Europe.

So, this platform has given us the ability to be not only that catalyst for change but a true leader in this space so that we can meet patient's needs while continuing to deliver on our financial commitments. So with that, I'm going to turn it over to Rajiv. I can't thank you guys enough. It is great to be together. Like I said, look forward to your questions and answers afterwards and the cocktail reception.

Rajiv Malik

Thank you, Heather, for laying the foundation of this beautiful story. And I am going to do my best, along with this team, to put some more meat on these bones. The next few minutes I'm going to share with you why we believe in this story, in what way we believe this is a differentiated asset. It is a diversified asset. More importantly how we have transformed and evolved over the last three to four years.

We met last in August of 2013. Mylan has changed a lot and I'm going to share with you in what dimensions and how many dimensions we have changed and evolved. And I am also going to share with you why we believe that we have a lot of growth ahead of us. With that I'm going to jump onto my first slide and again bring this slide which Heather shared with you. This is just to highlight that this market is -- there is still a lot in this market. This is the IMS data, about 1 billion population being added over the next 12 years; age 65 plus, about 10.5 billion patients are people in that age group. Pharma spend increasing by about another 400 billion. But more importantly the volume, the doses are about 1 trillion additional doses required by the system.

And just one more slide on this same, which is very relevant for what we're going to talk to you about, is about a difference between the developed countries and far emerging countries. And the stark difference which is here and if you just enter the Rx bucket that how much of Rx bucket is not getting to these far emerging countries, many of the big pharma is not launching their latest innovations of new products in those countries for obvious reasons. But there is a lot of Bx, which is the branded generics, Gx and Ox. And that is where I want to draw your attention to when we talk about our growth opportunity in these markets.

Let's look into the top 20 countries based on IMS data. So I have just marked blue where Mylan has significant commercial presence and orange ones show Mylan has a margin commercial presence where we have established some commercial foot presence, where we have some foot soldiers. So take even the markets like U.S., Germany, Japan, we will talk to you about it is not that we -- there is no opportunity to grow there. There is a lot of opportunity for us to grow in these markets, but just look into the China, Brazil, India, Russia, Turkey, Mexico, Poland. All these markets we have -- we'll share with you we have now I am not going to call significant commercial presence but we have made a start. We have people on the ground, we have salespeople on the ground, we have products now available to us. We have a huge pipeline and we're going to share with you why we are excited about this far emerging market growth.

Two countries we see over here, maybe one South Korea, we don't have the commercial infrastructure but we still sell some products through our export channel. And why we believe we are uniquely positioned to provide greater access. Every word on this slide I'm going to walk you through in the next hour or so of unmatched operating perform. We are going to share with you strong R&D pipeline, and more importantly the capabilities, the technologies, the range of technologies we have assembled, global manufacturing skill with extensive capabilities, and a true global supply chain. It is not just because we are globally presence so it is a global supply chain. We think about these products and many of these products in a global way. And second to none operating team. At the same time on the right-hand side you will see it is very different; it is just not a generics platform, it is a diversified commercial platform with a deep and broad portfolio of more than 7,500 products, critical mass in all channels including Gx, Rx, OTC as well as institutional. Global reach across 165 markets, globally integrated sales and marketing team and some very strong strategic relationship with our key customers across the globe.

Before I take you to the R&D or our operating platform I would like to share with you what changed for us over the last three to four years. We made some strategic moves. And just say that [indiscernible] was Agila, Abbott, Famy Care, Renaissance, how they helped us enhance already strong operational platform which we had in 2013. I put Agila there because when we met you we had announced Agila but not closed Agila. But Agila has given us a critical mass in injectable manufacturing, a strong R&D pipeline and more importantly a platform.

Abbott expanded our European footprint manufacturing footprint, we got a very nice facility in one of our key markets, France. And other state-of-the-art facility in Japan. We got some flu vaccine capabilities.

Famy Care got us to the scale in oral contraceptive manufacturing. They're the world's largest provider of oral contraceptives which is a part of Mylan team. Leading R&D for hormonal contraceptive products and a global pipeline.

Renaissance, we were really missing a derma portfolio, but more importantly derma capabilities. Through Renaissance we have acquired a range of technologies around topical manufacturing, but more importantly R&D pipeline and a great team.

Meda, brought us OTC capabilities, OTC manufacturing, OTC R&D and some additional capabilities with [nescience]. But the story on the commercial world is more exciting because it helped us transform our business which we will share with you.

Agila gave us a little footstep in Brazil which we are building upon. Abbott enhanced our position beyond USA. It significantly helped us increase our presence in Japan, Canada and many of the European markets. Later on Meda basically gave us almost double the size of these markets especially I would say in Europe. You will hear from us how our position in Italy, Germany, Spain, Portugal, we significantly enhanced our position and we got a decent scale in the Eastern European market. How, more importantly, we acquired a strong medical sales and marketing infrastructure in these markets through Abbott and Meda. Meda brought us a very vital component which we were missing is the OTC commercial infrastructure. And Famy Care gave us a significant piece on the human healthcare franchise.

So with this I think we acquired a lot which we were missing and more importantly were looking out for. And because of the number of products which are coming already like biosimilars or respiratory products.

It is not about just what we acquire, this is where we are, we differentiate ourselves and I am so proud of what we have done with these assets. It is just not about acquiring, it is what we do with these assets we acquire. And integration is a very big activity follow us. It starts way before we acquire this asset. It starts with understanding the culture of [indiscernible] organization. And more importantly what can we do with an asset.

And you start with that and you share that within your partner. We bring them on board that what we can achieve with this asset along with that team. And I think you will set the stage for a successful integration and that is what we have proved again and again.

Focus on business continuity. Many people say 1 plus 1 is going to make 4. Yes, first of all 1 plus 1 needs to make 2. So let's continue with the business, let's ensure that the business continues. Let's retain the people because without people you don't have an asset.

We have taken our time to develop integrated operating models because if we would have gone with this Rx and OTC business and Gx and just put them the way they are we would have lost not just cost synergies but value creation which opportunity we have in the front. Harmonized best practices and processes. Meda or Abbott, gave us so many such opportunities which we have been able to retain and bring it back to our Mylan legacy processes. And rationalization, the infrastructure, optimizing the infrastructure, doing more with what we have is an ongoing process. And every [indiscernible] especially these last two buckets over here continue optimizing and do more with more. We have a focused team, dedicated time. And a commercial we are trying to follow and establish. And not on the [indiscernible] we have done followed a One Mylan approach. There is a team to focus on cross pollination. How can we take these products to all the geographies.

Optimize sales and marketing infrastructure. Operationally we have got a lot now. How do we optimize this manufacturing footprint, and reduce cost in both direct and indirect spending and leverage R&D, more importantly the capabilities as well as the investments? At enterprise-level there is a lot of opportunity here and we call this function as a GIS. There is a lot of backroom activities which can be pulled together, but it is more about the processes. It is more about that once you harmonize the processes the [indiscernible] can be pulled together and that is what we are doing on an integrated way. Leverage technology. All this hard work has to pay. And it is paying in terms of synergies. Restructuring which we have taken, which we announced sometime back. Sourcing, vertical integration, a lot of products which came in were again with the third parties and we have been able to vertically integrate those products, optimizing our manufacturing footprint, leveraging shared services and value creation. So, as I shared with you in my approval when we last spoke on the earnings, we are well on a plan to accelerate and achieve almost double of whatever Meda synergy targets we had put for ourselves.

And more importantly, we are still perceived as a very U.S. centric Company which is not the case. We are diversified by geography, 45% of our business is now North America, 31% Europe, 24% rest of the world. And when you think and when you guys talk about -- when we all talk about the headwinds around the generics pricing and all that, we have to take into consideration this diversification. We have to take into -- take a point of view about how Europe is performing, how rest of the world is performing. And more importantly I think between the Rx, Gx and OTC, it is a great fit for us now. With the OTC although 8% but a great opportunity for us to grow. And our operations -- just a snapshot before I go into the -- talk further about operations. Capacity enhancement or [indiscernible] $54 billion to $80 billion. More importantly across the board on complex products we almost increased five times the capacity. 1,100 unique products in 2013 which we shared with you; we have 2,300 unique products today, 7,500 market products, but more importantly the pipeline. The strength of the pipeline, the pending approval, plant submissions and we are almost investing only 456 million, we invested $456 million in '13 when we last spoke. Today we are investing $750 million in the same R&D.

So let me talk about the operating platform which we all talk so proudly and are so proud of. And you have to take a closer look into this. It is not just about the numbers, it is about the capabilities and the complexity which we have pulled together and why we believe that we can deliver.

50 global manufacturing sites across the globe with 10 sites in North America, 12 in Europe, 25 sites in India, two in Japan and one in Australia, across multiple dosage forms. But it is a truly global network. We know in a very globalized way we exactly know where we are making our key products, what we are making, why we are making, how do we control them, how do we manage them. So it is a very integrated, it is not just we have a number of sites and they are on its own we exactly know why we are doing what we are doing. Many of these sites have proximity to the key markets. 80% of our euro products are made at U.S. sites. Just a small staff. France our number two site has three manufacturing sites just in the close proximity of that market. Japan our other key market has two sites. So, yes, we have structured it in a way, it is a very well thought out and well laid out plan and we still have some regional supplies. Because the complexity of Europe just cannot be managed by one or two sites around the world. So sites like Europe we have a regional site at [indiscernible] where we bring the products in maybe it's packaging or distribution, but we do a lot over there in Europe through those 12 sites.

And when it comes to the cost optimization, vertical integration, India, Indian sites play a huge role. And we still make 80%, approximately 80% of our products internally and we control our destiny with more importantly from the supply chain perspective as well as from the cost of goods perspective.

And I want to walk you through this slide. 24 oral solid dosage sites, 80 billion doses. But please understand it is not just tablets, it is about a range of technologies you have over there. Whether it's multilayer tablets, whether it is orally dissolving tablets, OROS tablets, hot-melt exclusion, Wurster, spheronization, you talk about it, that is where the complexity and the differentiation lies. You talk about injectables, it is not about just lyophilized products, it is about the bags, the prefilled syringes, the microspheres, the emulsions you talk about. And we will share with you some of those examples that this is what it makes different or diversified or differentiated.

Complex products, transdermal patches, topicals just take an example of topicals, the forms, the ointments, the lotions, nasals, dry powder inhalers, pens and we're still investing in this platform. We still continue to invest. We are investing in the automation of these plants. We are investing to further fine tune this network. And also we have some dedicated sites I would like to mention on the previous one, whether it is oncology products, the hormonal products, certain cephalosporin for injectables. So you name it we have that complexity built in that. A lot has changed in Mylan over the last 50 years.

One thing that has not changed is about our philosophy to the quality. How we think about this, how do we react to what is handed over to us. It is not that we don't have our issues, it is about how we deal with those issues. We are engaged; we are engaged with the regulators, we exactly, we have no other option but to be engaged and stay close to this space. Because it can impact a lot when it comes to our business. And we always, we have our share of you talk about those 50 sites. Last year we had more than 90 health authority inspections. Not just from FDA, US FDA or MHRA, but a number of agencies all around the world. So this should tell you what we deal on around the world every day with these sites.

Let me talk to our one of the best assets, R&D. Our R&D never sleeps. They work around 24 hours, integrated R&D network of two global sites at Morgantown and Hyderabad. But 12 technology focused on these sites with more than 3,000 scientists across the globe. Over the last since we met from 2013 to 2017, we will be spending close to $3 billion cumulatively on R&D. But as we said in 2013, we will be this pie will be moving more from more towards the respiratory, biosimilar or complex products. So that is where we are investing in a big way. We are still significantly investing in our base generics and our core generics business.

Let's just talk about pipeline and these various aspects, R&D or oral solids. A strong team of 1,300 scientists, 601 unique products which will have about eight OROS technology products, 18 bilayer products, 405 immediate release tablets and capsules and you can go on. So it is not just a number, it is a complexity and the technology behind this number, 940 submissions pending approval and another 2,900 planned submissions over the next few years.

Talk about injectables. $44 billion RMS brand value, 500 scientists, 389 unique products. This business is coming to life. This franchise is coming to life lyophilization, prefilled syringes. We are expecting, and Tony will share with you, why we believe we can still double this business over the next few years, because we are looking at launching more than 800 products over the next four to five years from this pipeline. Still 654 submissions pending approval and 819 planned submissions. And some, as I mentioned dedicated sites, whether it comes to the oncology, hormones, beta lactams and cephalosporins, because all of these require dedicated assets. OTC, you talk about the integration. We knew how sensitive and how important is for us to retain this workforce at Monzai Italy, when we acquired Meda. So we have been able to retain that small but smart team and they are working internally to develop some line extensions of some of the brands which are already out there in the market.

But we plan to invest a lot more in this space, because this is one of the exciting growth opportunities we have for us in the future. We have today currently about 40 unique products in pipeline, but I'm sure Sanjeev's team is now looking into it, how can we do more with this and how can we add more given our scale and size.

Topicals, I cannot be more excited for this portfolio because we acquired what we acquired with Renaissance. But I think across the globe, whether it has been Europe or rest of the world markets, we have not been able to launch any topical product because we didn't have a lot of topical assets.

But what we have acquired with Renaissance, now we have everything what we need. So we are looking forward to take this portfolio and further add to this portfolio over the next couple of years.

We are going to talk more about our respiratory programs, especially generic Advair and also revefenacin. We have been able to not only retain but grow this 140 scientist team which we acquired from Pfizer few years back at Sandwich UK. We have been able to retain and build upon that. We have today 26 unique products in pipeline, six DPIs, another six MDIs, eight nasals and nebulizers.

We are going to again talk in depth about our biosimilar portfolio. We are going to talk about -- we are very excited to share with the progress we have made over the last three to four years. Andrea is going to come up with me and talk about that. But we are going to talk about submissions we have made and a lot more which has been planned with this portfolio.

And I'm going to tell you we can't do this alone. And this is something which is a very complex area -- complex subject matter and that is why this strong partnership with the Biocon and Momenta. We have worked like in a -- as a team in a seamless way and that is key to the execution around this platform.

Let's just sum it up: about 1,219 products in pipeline, IMS value of $330 billion, with a planned submission of 6,000 -- more than 6,000 planned global submissions, more than 1,800 pending approval, 45 first-to-files pending with the US. And I've just given a breakup in how much of this is North America, how much is in Europe and how much is ROU (sic - see slide 57 - ROW). That is why we feel so excited about the opportunities which lie above. Now we have commercial infrastructure, we can do more with this platform.

So I am going to invite Andrea and Walt to come up and join me. And we're going to give you an update on our biosimilars program. Heather talked of the continuity of the team, this is what it means. Their roles in the organizations have evolved, but their goals have not evolved. They still own the same projects we stay on a few years back. That is one key to their success when you come to the execution.

Many others today in industry are having second thoughts about how much to go, how much to invest because there are still certain gray areas. We understand that. But I think we have shown our commitment and we continue to stay committed to this investment because we believe that we're going to need this. As we go along this healthcare system is going to need this.

With that, Andrea, I am going to hand it over to you.

Andrea Miller

Okay, thank you, Rajiv. As Rajiv said, I am going to give you some very exciting news today, talk about our progress. But one thing that hasn't changed, and I think I may be preaching to the choir here, is that the biologics market is not a small market by any means. As the data up here shows, you all probably have even more data than I do, but it is a continually growing market. There are over 900 biologics in development today. So there is quite a bit feeding the pipeline for biosimilars. There is going to be continually markets come in. So this is just not a small play and a small investment for a handful of products. It is literally the beginning of what I am going to call the biosimilar industry. So if you can't hear we are not a one product Company, you can hear my passion about biosimilars. So we will spend a little bit of time.

What is our opportunity? Where are we playing right now? Currently we have 16 products in our portfolio. We believe that is one of the world's largest portfolios of biosimilars. And eight out of the 10 of those, if you look at the top 10 biologics, we have eight of those in our portfolio. I'm not going to spend a lot of time on how we did our selection for our products. But we had a strategic plan for how we selected our products, how we chose our portfolio. I would like to really focus on our partners and our geographies. Rajiv already mentioned our partnership. We did partner with Biocon and have half of our portfolio with them with the other half of our portfolio with Momenta. Those are key. We are building our own internal capabilities, we have internal capabilities, but we complement each other. And so, again, 1 plus 1 equals 4 when we put together all of our strengths and come up with solutions. So they've proven to be good partners for us. And our geographies, as we come to market, we own the rights for that key markets, we will be launching in the key markets. And we have early entry markets for the emerging markets as has been demonstrated by our success that we have had with Hertraz launching trastuzumab in now 13 countries.

Looking at the portfolio, there's a lot of people that will talk about wave one, wave two, wave three based off of what the patent expiry is. And I have just listed a selection here of different brands that will reaching patent expiration date during each of those waves. As you see, we didn't enter the biologics game until 2009 with Biocon. So we really didn't pay attention to the human growth hormones, we were a little late to the game. So we put all of our focus on the 2014 to 2020 with Biocon and that is the focus of that portfolio. This past year, with our signing and our collaboration with Momenta, we are now focusing on the third wave, the products in 2021 to 2025, so focusing on developing those products with them.

Now it is an exciting part for me to talk about. Last time we talked in '13 we were busy, we were busy in development. And when we spoke we had eight products in the portfolio and those eight products are listed here. Actually there is an extra product there, so I apologize for that, filgrastim was not in here. But we had just announced in 2013 the collaboration with Biocon on glargine, Aspart And lispro. And this was where we were in our development. We were again busy, progressing ahead, but still pretty much early development, still getting our feet wet.

Since that time the team has been very focused on execution. So in that time period out of those eight products we have had five of them now advance through their Phase 3 and into clinical trials, the confirmatory clinical trials. And three of those programs are now in submission states. So let's just take a quick look at where we have come.

Trastuzumab, you have heard a little bit about that with Hertraz. You see that at the time we talked last it had just entered its clinical trial. And now we have found an application for that product both in Europe and in US. And while we that we were a little late to the game for wave one, we believe, we actually don't believe, we are very firm in our belief that we are the first application filed in the US for trastuzumab for BLA, a BLA. Pegfilgrastim we progressed from preclinical to submission and that product now is submitted in Europe, US, Canada and Australia.

The third one of our lead product is insulin glargine. As we brought that on we were again at the Phase 1 portion and now have advanced that to a submission through clinical trials, have submitted that in US and in Canada, excuse me, misspoke, submitted that in Europe and in Canada and actually just submitted it in Australia yesterday. So our numbers are even actually a little out of date here, we just submitted it in Australia. And we are working on our US submission to go in later this year.

Rajiv Malik

I have to add, one on the execution part, that is what we say we are good at it. We said something and we followed it up. And I am just going to build upon the insulin, which is highly complex when it comes to science. But we have a real good science around this program. We are constantly engaged with the FDA because we have continued to work towards [switch ability] which we are pretty confident.

And we are, we are very close to filing this product. I will call it eminent filing in the next, over the next few weeks and months, we going to file this product. We have already filed and got a very good feedback from our European health regulators. So all these programs, I think after we talk, we have added a lot but we have executed upon what we said a few years back.

Andrea Miller

Thank you, Rajiv. And that is absolutely right. And then I mentioned we did add pegfilgrastim, which is a wave one product. But we added that as a complementary portfolio actually to, at our sales request and in collaboration with our pegfilgrastim.

In addition, we will talk a little bit about the Momenta progress and the progress with the products we are collaborating with Momenta. As announced in January, we have signed a collaboration on six products with only one disclosed at this point is ORENCIA. And we have been busy with them since we started that collaboration, extremely busy. And have advanced the ORENCIA into PK/PD, the Phase 1, which should read out at the end of this year and be looking to go into clinical trials thereafter.

We are also advancing, as you see, another product is advancing fairly close and getting very close to preclinical also. And then as we have these two partnerships, as we are focusing on the bulk of our portfolio, we always look at opportunities to in license product to fill niches or to help expand our portfolio. An example of that is our deal, our in license this year with Mabion, rituximab for Europe. And that product now is going into a confirmatory Phase 3 trial.

So we talked last time and what we talked about we have been executing, we have invested and we have executed on development. And we are continuing to do that and will continue to do that with the portfolio. But this is exciting for me because now I am talking to my commercial partners, I look at them in the front row and I am talking to my commercial partners, because now we are advancing towards commercialization.

We are actually, and my background, as I mentioned -- I don't know if I mentioned -- is regulatory. So we are actually now into filing the applications which is an exciting time. We have now actually nine submitted applications and with five additional in developed markets. And this coming year we are looking at filing additional applications for trastuzumab, pegfilgrastim, insulin glargine and now adding some applications for bevacizumab and adalimumab. And if you look, we also are submitting in emerging markets, again, keeping the same trastuzumab model for some of our upcoming products. The other thing we have done in this last year is that we had over 50 -- or not this past year, in the past four years we have had over 50 interactions with health authorities, either through direct meetings or scientific advice. And that is very critical. We have been able to go in and talk to them and it just shows, as Rajiv said, we have added bench strength to our team but we also have consistency and it is getting that experience.

Rajiv Malik

Now, and I want to again emphasize this, the value of these interactions because every interaction, believe me, is at the root of science. We learn something new, we learn about their expectations, we know some other partners who are coming in and talk about certain things. So it has been a great value add these 50 meetings.

Andrea Miller

Not only have we been able to advance in our regulatory filings and our development programs, but now we've been able to get our actual data and be able to share it with the scientific community, and to be able to share the results of our development, of our research and our clinical trials. And this past year has been a sort of red letter year for us; we have had some pretty prestigious recognition in the scientific community. The HERITAGE trial, which is our trastuzumab trial, biosimilar trial, was presented as late breaking in ASCO. And then followed up and submitted again in ESMO, which is in Europe, along with some of our data from pegfilgrastim. And then at the end of the year it was published in JAMA. And we believe that this is the first publication, biosimilar publication, study publication JAMA has conducted. So again building that reputation with the scientific community on the validity of your studies and your product. And then, while we have been investing in development, investing in submissions, the next piece we have to invest in and we are investing in is the commercial manufacturing.

Rajiv Malik

And this is also again a very critical aspect because R&D -- science is complex, regulatory space has been challenging, legal is still evolving and then you have to invest upfront to build these manufacturing facilities. And that is where I think us being a little bit global, we have the flexibility that these assets when we build they are not sitting idle. We are putting them to use and shipping these products to the rest of the world markets. Andrea said we are today selling Hertraz our trastuzumab to 13 countries. So we have -- we're continuously working with our partners, accept big investments. For example, insulin we were here with you where we are. Accept investment close to about $300 million, which our partner and us are sharing the cost of that. And that is why some of these programs make sense that you have risk/reward approach to this and you have a partner with you because some of them otherwise can become very challenging programs.

Andrea Miller

Absolutely. And you see the diversity of some of the products with the monoclonal antibody facility for the drug substance, the micro facility and the insulins. But we will talk a little bit more about the insulins as he brought it up. With our collaboration partner, Biocon, we have developed probably one of the largest and most integrated facilities, campuses if I actually should say that, that there is for the insulin analogues where we have campus on the drug substance, the drug product and the assembly. So everything is contained within this campus. We actually have opportunities to expand more as we continue to develop into lispro and aspart and yet also balance that and still be able to manufacture in what we have.

I would like to take you all to Malaysia, it's just across from Singapore. But since I don't think I can do that what we will have is show you a brief video and take you through a tour through a brief video. You are going to see our upstream and downstream. It is a lot of stainless steel because it is fermentation. Walt will show you something with a lot more activity. But it is stainless steel with a lot of fermentation. But to show you the capacity, the breadth of our capacity and the broadness of the capacity, the complexity and then we will show you the filling process.

Rajiv Malik

It is important because people always have questions. It's one thing to file, it's one thing to go through the site, quick execution; it is another thing to bring the product to so many markets. And insulin specifically, the scale you need, the size and scale you need is a challenging question. And I think we and Mylan say seeing is believing so we have this small video for you.

Andrea Miller

So if we could we can go ahead and play the video of the Malaysia facility.

[Audio/Video Presentation]

Okay, with that I will turn it over to Walt.

Rajiv Malik

Yes. If you recall, Walt shared with you that I will say that was that the beginning of journey in generic Advair. And I am very excited to share with you the progress we have made over these last few years, the follow on we have done to what we have laid out for us, the goals we have laid out for us. Walt.

Walt Owens

Thank you, Rajiv, and good afternoon again, everybody. So I am going to try and confuse you and use the term Wixela Inhub for generic Advair; it is actually our proposed brand name for that product. So what you are going to see the out this particular presentation is the branding. And I'll also discuss with you some of our key updates around revefenacin that is for nebulization. When I came to you in 2013, as Rajiv said, this was in its it was the beginning. And now what I want to share with you is how far we have advanced in our preparation and operational readiness for the products as we move forward. So just a little bit of background. I think we all know the information. But we know that Advair, one of the top products in asthma and COPD, and complex drug device combination. Revefenacin is very different for us, it represents a brand product opportunity for us. It is a novel LAMA and indicated in COPD as well as gives us the opportunity for a once daily dosing regimen.

Rajiv Malik

And I would say last time when we spoke we talked about a product combo which was an ICS and LABA combination. We came almost maybe halfway when we evaluated that and from a commercial point of view the market has changed and that is why we left that program on the side and identified this very exciting opportunity which is a once a day LAMA.

Walt Owens

So let's just jump right into Wixela Inhub, again the generic equivalent of Advair. And where are we today and why are we so confident? I think the one thing we should focus on is the regulatory progress. And if you all recall back in 2013, actually not long after I was on the stage in front of you guidance issued draft guidance had issued that laid out five key criteria that needed to be met for submission of such a product and to be considered equivalent. This included formulation design, same componentry, same formulation design, in vitro equivalents, systemic equivalents through PK studies across all three strengths, as well as clinical equivalents conducted on the lowest strength of the product. And finally, there were device considerations, same size, shape, same operating principles and operating steps. And what I can tell you is that we have knocked off all of these. You can check the boxes for all of these components of the draft guidance as being met. And it really forms the basis for the filing that was made at the end of 2015 and is now progressing. And I think as this group knows and is well aware of, that we have our GDUFA goal date of March 28, 2017 coming up.

Rajiv Malik

And we had several pre submissions and post submissions interactions with the FDA on those three, four, five turns of the information requests. So FDA has been very engaged, there have been five preapproval inspections, whether it's a drug substance, or a device, or a clinical trial, wherever the clinical trials were conducted.

So there is nothing which has changed our confidence towards this when we talk about this our goal date of March 28. But just to be prudent, we are basically guiding, we are working towards being ready but we have [studied] -- we have taken into consideration everything which is moving and we are planning for midyear launch, summer, June launch, July launch of this product. And Walt, it will be good for also you to address the Sandoz citizen petition over here.

Walt Owens

Yes, thanks for that, Rajiv, I mean it is a reasonable tee up. So one thing I will say about that particular point is guidance is guidance. These are the fundamental criteria that need to be met to bring a product through the agency and to approval. But that being said, there is an incredible amount of science and detail and understanding that goes into the background. So understanding the characteristics and all of behaviors of the innovative product.

It is also understanding how this body of data needs to fit together to demonstrate equivalence. And as Rajiv also said, what is important is that long engagement and continued engagement with the agency to share data, information and understand each other's perspectives and learn what is being required.

One point I do want to focus on because I think in 2013 we focused on our pilot manufacturing, I am going to show you a little bit more about manufacturing. But I wanted to give you more insight about the device. And the guidance itself talks about having a robust device design. Fundamentally we have met those guidance criteria. But that guidance criteria is rather general.

And I think some of you may have seen that we have commented to the agency on February 6 of 2017 providing much more detailed considerations that should be taken into account when thinking about these respiratory devices and what criteria need to be met for them to be acceptable as a generic equivalent.

In addition, when we designed our device we considered the patient experience. And, for example, the device contains a large dose counter, it is very readable. There is a consistent feedback from dose to dose across the entire life of a single device and how it operates. There is a clear indicator of when the device needs to be refilled. And last but not least, it is unique in that our device has a last dose lockout feature.

So I can sit up here and can put all this in words for you, but what I am going to do is show you a movie clip on how this device actually functions. I will narrate it for you -- don't have any cute music behind it but I will narrate it for you and walk you through each of those steps so that you can see how this actually works. So if you want to go ahead and roll the video.

So Inhub, again, is our trademark for the device. The device, simple representation here with what our proposed branding and labeling will look like. Key features, this is what the patient is going to see and feel. It has a large dose counter window, the air vents become exposed when the mouthpiece cover is dropped and there is an activation lever, it is this yellow lever that actually actuates the device and then the patient inhales through the mouthpiece.

How is the device actually actuate, how does it operate? Same steps as the Advair Diskus, open the cover, you push down the lever to actuate the dose, the patient then would inhale and then the cover will be closed, indexing the dose counter down one dose.

Now something unique in the way our device operates is that the patient feedback across that actuation process is very smooth, it is a smooth force profile, which I can show you here. As you pull the lever down you will see the force profile that the patient actually feels in their hand as they actuate that device.

And then when it returns, when we close the cover and you index the dose counter down, by the same token you get a very smooth operation across the life of the device. And again, you will see this force profile coming back to you. And that will become important here in a moment. Prescription refill reminder, something that is very important in this patient population. So when the device reaches 10 doses remaining and it is actuated and used it will index down to nine but what you will see is that it indexes down to nine, there is a red indication in that window that stays with it through the end of the device.

Our device also contains a lock out. When you actuate the device at zero you try and pull this lever down you are going to meet substantial force, you can't actually push it down the full stroke, so that you know you have no doses left in the device. And as you can see, the force profile changes dramatically as that patient interfaces with that device at that point of lock out. So again, some of the unique features that have been built into our device and hopefully that gives you a feeling for how it operates, and gives you some sense of what that product is.

So now I want to move on to manufacturing and actually what I call operationalizing the science. When I was in front of you in 2013 we showed you a video of our pilot plant operations which actually made the submission of this particular product a reality. But now what I want to talk to you about is the actual commercial capability that we have now built in our Dublin facilities. We have built a state-of-the-art facility, it is end-to-end drug formulation, filling and device assembly. The facility itself was initiated in 2014 and then completed in November 2015. We have a workforce there now of about 220 folks on staff. And another important component of this overall product is to ensure that you have the device componentry on hand. We actually have a dedicated device component partner as well for the Wixela Inhub product.

What I am going to show you is Andrea took you to Malaysia, I'm going to take you to Ireland as we continue our world tour here. And what you are going to see in this upcoming video is the actual commercial equipment that we now have validated and on hand in Dublin operating, making product. You are going to see the filling of the discs, the drug containing discs that are used in the device. You are going to see how the device is actually assembled and you are going to see how the product is packaged. I am not going to narrate this one for you, there are cubes as to each one of those processes in the video. What you are also going to see in this video is a complex process with a high degree of automation and a high degree of technology. So with that we will let this video roll and I hope you enjoy this.

[Audio/Video Presentation]

So exciting stuff there for us and certainly kudos to our team in Ireland that is working on this and keeping this moving.

So moving on to revefenacin. Revefenacin, again as we said in the beginning, nebulized therapy for COPD, once daily dosing LAMA. Why revefenacin? It is an unmet medical need. If you look at the gold guidelines for COPD, LAMAs are actually a cornerstone of that therapy for moderate to severe COPD. And there is no nebulized LAMAs currently available as we stand here today.

Patient population is real. Greater than 100 million patient treatment days on nebulized COPT in general, as well as patients in this particular space are not naive to nebulization therapy. It is either being used as ongoing maintenance therapy or even on occasional bronchodilator therapy.

Where do we stand today? Very pleased with the outcome that we have seen from the replicated Phase 3 studies where we had a very robust and sustained improvement in FEV1. More importantly I think is the positive data that we saw with this being used as monotherapy, but also positive results associated with revefenacin being used as an add on therapy to standard treatment with LABA or LABA ICS combinations.

The drug is extremely well-tolerated. And where this puts us standing here today is that we plan on filing this particular product later this year. That is pending the results of our 12-month safety study that we are working through with our very experienced partner in Theravance Bio Pharma, that is expected to complete here in mid 2017.

Rajiv Malik

Thank you, Walt and Andrea. I am going to share with you certain brand names and I know you in your roles you want a lot of transparency about which product at what time and how much you have modeled. And we have all limitations, competitive limitations, certain regulatory limitations, or legal limitations. And we can't share with you everything and we understand that.

But I am going to say that for a Company with having all these assets and of this scale and size, you would expect us to have these brand names which are going to come up all next few years across the globe, launch these products across the globe. Exciting. And let me just some up before I invite my partner, Tony Mauro, up here with me. Just to sum up, very proud to share with you today the unmatched operating platform, strong industry leading pipeline, whether it is respiratory or leadership in OSDs, the building and diversity finding in OTC space, again, diversifying in the topicals, exciting story of the biosimilars. But more importantly the food chain behind the truly global supply network which we have behind that, the proximity to the key market, the control of our internal manufacturing, 80% internally controlled manufacturing. Continued investing, whether it is automation or expansion, on our upgrade of these facilities. And three things: liability, agility and cost -- our customers can count on us and quality at the core of everything we do.

With that I am going to close this chapter and invite Tony up with me to share with you it is one thing to have all this, it is what are we going to do with these assets. How we going to deploy these assets, in which markets? How exciting, not just new markets, but even the journey in our existing markets, whether it is USA or France or Germany, what more we see in those markets. So please, Tony.

Tony Mauro

Good afternoon. As Rajiv, Walt and Andrea, walking through those slides, the years of investment and time put into these products. We, me, my team, my partners in commercial around the world get the opportunity to be the face of the customer. And we get a chance to launch these products. And I can tell you we are excited and, perhaps more importantly, our customers are excited. So if you look at our commercial platform today, it really is about who we are as an organization, operating in 165 different countries, 75 marketed products across channels of generics, OTCs and Rx with over 5,000 sales team around the world, really about ONE Mylan shipping to 60,000 customers and trying always to be the partner of choice. To mean more to our customers than anyone else in our industry. That is our goal and that is who we are and what we are about. So when we think about what we are made of it is really a few things, it is a mixture of diversity, depth and scale. When I say diversity I mean we are not one market, one product or one country. Today we promote over 200 branded products around the world. We have six franchises over $1 billion from a therapeutic perspective.

And depth -- when I speak of depth I mean how are we executing in those local markets. In six of our top seven markets we have over 50% of our products that are ranked either number one or number two. Eight of our top 10 markets are growing faster than the market itself. So that is about performance in market. In the last but not least is about scale. This is how we deliver to our customers. 68 billion doses sold in 2016 and over 7,000 sales and marketing employees around the world. That is how we perform and how we execute to our plans to ensure that we are the partner of choice. So, I know there has been a lot of discussion around the generic business and certainly the generic business has been our foundation and it is very important to us in the future. And maintaining leadership is very important to that success. So what differentiates Mylan from everyone else? Really it is just a few very important key operating pieces: a broad offering, greater than 4,000 generic products sold around the world; global scale, 45 billion doses sold annually; a robust pipeline, 450 products launched in 2016 alone with 1,100 products for generics in our pipeline.

A diverse portfolio, not just on one particular dosage or form but multiple forms, multiple channels, and best-in-class service. This leads to strategic partnerships with our customers taking it from tactical to strategic in a more holistic portfolio fashion.

Rajiv Malik

And many times the question comes about consolidation of our customers, and what it means to us. Look into the flipside. When you have a broad offering, global scale, more importantly the exciting pipeline and such diversity it gives us an opportunity to change the dialogue with our customers and talk a little bit more long-term, long, take a strategic direction. And not many of our peers have that sort of global scale to talk to these customers in a global way.

Tony Mauro

So we believe not only has generics been a great historical piece for us, we think there is a very strong future for generics as well. If you look at our top markets, we think there is both a utilization opportunity and a share capture opportunity. From a top market perspective you can see three markets still are underneath 40% generic utilization, very important markets that [indiscernible] will talk to you about later. Additionally, we have three markets that have greater than 20% share. Most of our most important markets are in single-digits, so we to believe not only is there an opportunity to increase utilization around the world, but to increase capture of market share in our most important markets.

Rajiv Malik

And we always talked about, even in '13 we talked about this growth opportunity. And [indiscernible] you look at that previous slide, France, if I remember correctly, was at about 34% and has improved about 4% or 5% from the generic utilization over the last four years. But Italy has gone from 17% to 21%. So it is happening, it is not these numbers, but it is the chain that generic utilization is coming through.

Tony Mauro

So with that strong history and that great future we have in front of us even the U.S. we think is a very, very good opportunity for generics. If you look at the generics only market from an IMS perspective today it is about slightly over $60 billion. We participate in half of those products. So half of the product opportunity are in the form of BD and pipeline that we haven't even captured today. In the 31 billion of accessible market we do participate in we have about 20% market share, about $6.4 billion in IMS value. So once again, an opportunity to add new products to our portfolio and an opportunity to add market share in our existing business.

So moving to our Rx business, a very, very important segment of our business from our acquisitions of EPD and Meda and certainly our U.S. business. As you saw earlier, this now makes up almost 30% of our global revenue. And really it is a story about focus and a story about growth. It's about promoting the right products in the right markets. Ensuring you are optimizing your commercial infrastructure, you are prioritizing the products appropriately. You are building efficiencies and you are doing this in a ONE Mylan fashion.

It's about dedicated focus around these key brands, ensuring that not only locally but globally you have that focus to ensure that you continue to grow these products in the markets you want.

Rajiv Malik

And while are into the integration phase and that is what we said, Mylan integration, we took a step back that we were not just integrating Meda or [Indiscernible] we said we have acquired a lot, we have changed our dimension, scope has changed in many markets, which is the right way to deploy these assets in these markets. So we took a step back and we called it Mylan integration because if you just look into this Rx, if you don't focus on this, and we have a very small team whose job is to live this brand, their job is to just live this brand. And we have already seen we have been able to arrest not only arrest the decline but turn them into the growth part. But it is about the love, tender care that these brands need some of these. These are not $1 billion brands anymore, but these are still a very exciting branch a bunch of the branch. And that is where what we meant from integrating looking back how to deploy this, as I said. That is also what led to our segment reporting and change in because this is how we are managing these businesses.

Tony Mauro

Yes, and it is about, as Heather's video showed, we are much more than one product, actually greater than 200 products detailed around the world. And how do we continue to innovate around our existing portfolio and bring new products like revefenacin to market. And certainly there will be multiple opportunities to expand our geographic reach and build these brands in new markets as well. So, you saw earlier a lot of discussion around OTC. Certainly a very, very vital and great opportunity for Mylan, a $75 billion global market, we currently have $1 billion in sales. We plan to double this business over the next five years. We have 200 products we currently serve the markets with from an OTC perspective, and a portfolio a pipeline of 293 submissions pending. Really a great opportunity to double that business including executing on Rx to OTC switches and promoting and reintegrating some of the legacy Mylan OTC products as well.

Rajiv Malik

You will see us not only growing our internal brand here, Yes, Rx to OTC and some internal R&D. But we will keep on adding and dropping opportunities like Cold EEZE, a brand here, and brand there depending on the need of those markets. So you will see us doing some business development and spending some BD dollars to add on some and drop some more brands into this portfolio.

Tony Mauro

OTCs are a tremendous opportunity for us to expand our retail partnerships around the world. Today we have got a very good generic and Rx business. And with OTCs it is very complementary with our customers in many markets to really enhance and expand upon that partnership. So injectables in the same way. With Agila, with Bioniche we have seen this has been a very good business for us, $336 billion market. Today we do about $1 billion in sales. Once again, planning to double this business over the next five years. It starts with a very broad portfolio. A portfolio of 870 products across multiple technologies, long acting injectables, bags, oncology, vials and prefilled syringes. And it is about launches, 820 new product launches over the next five years and 389 products in our pipeline awaiting submission.

Rajiv Malik

Actually one area which we are not satisfied with what we did with this asset so far, because these are only two markets have leveraged this opportunity, that is USA and France. We see a lot of organic growth outside these two markets. We are working on the European institutional strategy because that is imperative for us to get right before we bring biosimilars. So we are working on that you put that in place and it will be a great actually the growth driver for the rest of the world markets, because those markets, there are not many providers for these products.

Tony Mauro

And then dermatology, with our acquisition of Meda and Renaissance here in the U.S., a $30 billion market that is growing fast, complex manufacturing, complex development, we have got $500 million of revenue today and will double over the next five years.

It starts again with a theory broad, diverse portfolio globally of 500 complementary brand and generic products, 42 products in our pipeline and a dedicated sales force in the U.S. and Europe and the rest of world. This is a great opportunity to take these assets and bring them to new markets to expand this reach.

Rajiv Malik

Renaissance has provided us this opportunity because outside U.S., Meda provided us this commercial platform but not many products. They had what they had but they didn't have a pipeline. So now Meda has provided us that pipeline and that opportunity to drop more products into these markets.

Tony talked about these three areas about injectables, OTC and its underlying theme is about focus. And this is a story about that if you focus and hone in on something you can create.

Eight years back, seven, eight years back HIV drug products, we were nowhere in the game, it was zero. That sheet which we take you, we were selling some APIs but no drug products. Today we are the leading provider not only in the sub Sahara but across the globe. And 45% of HIV patients are on Mylan. But it took us -- took R&D investment, the innovation, the investment in the CapEx and the capacity -- it is just not $4 billion, it is the tons of the API which you have to drop into this to sustain this market.

And working with our partners, partners at the policy level whether it is WHO, whether it is Global Fund, Clinton Foundation, medicine patent pool, working with partners and then working with partners like Gilead, J&J. And we have created something which we are so proud of which is now going to be the backbone of our emerging market business.

But still a lot of growth when you look into the prep, the pre-exposure prophylaxis of the TLE, new therapies, which we are -- continue to stay ahead on, and market expansion which new markets which are coming already like Mexico, Latin America, China and many other markets where we have not launched these products.

And more importantly extending this infrastructure to the similar category like antimalarials and tuberculosis, so we see a huge opportunity, and I think we are sharing with you these nuggets because this is how we're going to bring these together when we go into several market-to-market discussions.

Tony Mauro

Yes, and I think as Rajiv just articulated, this is a great foundational approach to building our emerging markets business, really ensuring that you build it from the ground up in a right way to ensure success.

Rajiv Malik

I am going to invite Adele for you to come up and just share with you -- Heather shared this picture with you, but it is about another lens we are applying and taking these -- all these assets because every market is a unique market. So there are opportunities for us now deployed -- not just showcase, but deploy these assets and in meaningful different ways. And Adele is going to share with you what we mean by this franchise value creation, please.

Adele Gulfo

Thank you. So you have heard a little bit about our therapeutic area franchises at a very high level. I will attempt to bring a bit more clarity on our franchise approach and how we intend to create value with that. Beginning with the assets that make up the franchises, so you've heard about a broad portfolio of existing products, we have a robust pipeline, and we also have healthcare services and solutions. And in a minute, I’ll give you some more examples on that. But the point is that we take a very holistic view of the assets that make up our franchise areas. And that holistic view includes the talented workforce, our clinical, our selling expertise, our field operations, all of the assets that we have in a variety of regions especially our commercial platform.

And we take all of those assets and we categorize them depending on the therapeutic area by which they fall into as well as the channel through which the product flows to the market. So imagine, how excited in my role in commercial development, the pipeline that we have coming forward. The robust pipeline that we have is going to significantly bolster several of our key therapeutic areas specifically oncology, respiratory, infectious disease and diabetes. These pipeline assets combines with our existing portfolio is how we will create an even compelling value proposition for our particular customers in those individual regions where we complete, that’s what differentiate Mylan, our ability to look across the GX, RX, OTC and that healthcare solutions.

So examples of the healthcare solutions, these are just a few examples that help us to complement and strengthen that value proposition. I’ll share few in the oncology area as I think that’s the most exciting; one is a very recent partnership that we have entered into with ChemoID, which is going to help physicians to personalize chemotherapy for patients based on their specific tumor type. Now this is a diagnostic that’s still in development, but we are very excited about the potential that we have when we bring this to market. We also have an exciting partnership with companion diagnostic in markets like India, and that allows us to positions to help with early detection of patient who are HER2 positive breast cancer.

In addition to the physician, the mobile apps that we have up there, I’ll also highlight that we have several solutions for our patients including a comprehensive patient support network that we call Ashray. Ashray is deployed right now specifically for women with breast cancer, but we have in development to go beyond breast cancer into our other therapeutic areas. And then you will see there MyFreshStart for cardiovascular lifestyle support et cetera. This is an example, just a few examples of what we mean by those healthcare services and solutions and how we believe that they will help us to differentiate and enhance the value proposition in a particular market where that make sense.

So let me attempt to sum it all up for you very much at a high level with our oncology franchise. You can see here, I’ll highlight the key assets at a global level. We have $730 million in revenue that was generated in 2016 from our existing portfolio, our Gx, Rx and OTC products across the cancer care continuum. We have over $20 billion in pipeline assets for our oncology portfolio as estimated by IMS brand data. And I talked about several of our healthcare services and solutions that we had in the oncology franchise. So these products and services when taking together, they are commercialized locally in a market and that’s when tapped into that clinical marketing and selling expertise in a particular market depending on the unique needs of that market and the unique value preposition for that customer. And off course that where we will tap into this powerful operating platform that we've established in many of our key markets around the world.

Rajiv Malik

Especially when you will go back to the picture we showed in the beginning about the global for our margin markets, where almost 76% of the market is between Bx, Gx and Ox and you pull this all asset together. Those markets are sure ready for a portfolio of similar, because it's between Rx, Gx, Sx they are looking for all that because they are not substitution market or they are not large peak tender market. They are branded genetic market where you need all these assets. So its opportunity for us to deploy pull this first of all and that deploy these assets in those markets.

Tony Mauro

Thank you and I think as Adel talked about kind of enhancing this patient experience and I'd say we want to be the partner of choice meaning more to customers. Our global commercial strategy really is pulling that all together, starting with our generics leadership around the world maximizing key brands in our Rx business and then accelerating our OTC platform after the acquisition of Meda. We want to be a champion to position our key therapeutic franchises. We're going to continue to lead these top markets and create new technologies and bring these to new geographic markets, once again to be that, that partner our customers expect. This is our focus externally, so what our customers and each market want, knowing there business, knowing the needs of that market and really executing on that plan.

Sanjeev Sethi

Yes, it's not to both having these nuggets where it was OTC, injectable, dermatology, key branch a bunch of brands or a leading Gx global portfolio, it's about deploying them. And there is one thing that cannot, we're going to say that we know how to do it, we've prove it and we will continue to demonstrate that how to deploy to the best of the opportunity. I think we're going to now see how we're deploying it in some of the key markets and key more importantly where we have; either leadership or we have a great opportunity. I'm going to Tony is going to start with the U.S. as a market and then we will, hear more about Europe from Jacek.

Tony Mauro

Thanks Sanjeev, and I know we've talked a little bit about the U.S. market today already, but just to reinforce; today we're number two in the generic market both in volume and value in the U.S Number one in unit dose volume for institutions and number four in the institutional class itself including unit dose and then bringing over our injectable business. And this is very important because it really lays the foundation of framework for biologic products, oncology products in particular for the U.S. market place and that’s a very encouraging sign.

Today greater than 50% of our products in U.S. are ranked number one or number two and we have 350 million prescriptions a year, one of about every thirteen products filled in the U.S. So we've got an exciting future. Future filled with many launches as you heard from Walt with Wixela, Inhub and our generic Advair product as well as generic Copaxone. We look forward to commercializing successfully a biosimilars here in the future as well and becoming a top dermatology player.

Rajiv Malik

Tony, I think we should rewind them up at picture, you've showed them on the U.S. There we only play in 31 billion opportune to a $60 billion opportunity. So, there is an opportunity to grow within that space horizontal other than that new launches and new products.

Tony Mauro

Absolutely and we get a chance to use our commercial platform, our infrastructure, the sales performance today and see expand the growth of Dymista to the acquisition of Meda. In support to commercial development of revefenacin to ensure, not just a launch, but a successful launch. We've got tremendous OTC opportunities and we'll continue to expand access to epinephrine auto injectors around the U.S. market. We will look for new opportunities both internally from a pipeline perspective as well as great product opportunities we may not have today. Truly some great opportunities here in the U.S. market.

And then if you look at our portfolio in the U.S. this is really about diversity, durability and sustainability. Over the last 50 years we built a portfolio in the U.S. of generic products -- over 500 generic products actually and have launched and continually re-fed that pipeline with new launches. As you can see with this graph 35% of all our IMS valued revenue comes from products over 10 years old, actually 60% of our doses are from products greater than 10 years old. 50% of IMS revenue comes from products over five years old but what's important is you just don't rest, you always bring in new investment, new products to launch every year. That's what provides balance, that provides diversity, that's what differentiates Mylan from so many people and as you look across that graph which you'll see is -- competition is always robust in our industry whether it's a newly launched product less than few years old, or product that's 10 years old, it's about competing, it's about bringing new products to market, it's about continuing to sustainable for the long term. That's what makes the difference for Mylan and for our customers.

Rajiv Malik

And that's why when you ask us about the generics price area, we take this picture and we take our current performance and we role it forward and that's how we come up and tell you what we tell you.

Tony Mauro

So, moving onto to an equally a great story is Japan; Japan is a wonderful example of transformation taking our partnership in the collaboration with Pfizer, the strengths of both organizations, as Heather said, their commercial presence, our operational platform and pipeline; and the example is in what the result is, the execution. Before our collaboration we were number 11 in that market; today, we're number four in the generic value market of Japan. At the same time we've got a very sizeable Rx platform with 400 dedicated sales representatives selling to over 50,000 physicians and our flagship brand is Amitiza, so tremendous opportunity both to continue as that generic utilization growth from 29% up as well as new opportunities to bring new products into our Rx infrastructure that we've and continue to grow in Japan. So, it's an exciting, exciting business.

Rajiv Malik

Emerging markets, so, so far I think our backbone of our emerging market business is largely you'll see a large chunk in Africa is HIV business. We till by 2013 I would say, we had 70 countries, but largely it was export business. We've a seasoned commercial team of only 350 people. Meda had taken us to another level and we -- not only we have strong foot presence, commercial presence, exciting opportunities in these countries, about 1,500 foot soldiers and we cover about 125,000 physicians in these markets. So, if you look into the IMS rank, those charts I shared with you, and look at these eight-nine markets; we have today foot soldiers, China, Brazil, India, Russia and we've products, it's about -- because Meda didn't have products.

Meda didn't have a deep pipeline, Meda had a commercial infrastructure and we're portfolio expansions through cross pollination, dedicated team and the scientist into and taking these products to these geographies. Leverage our strong ARV expertise around the tender markets and drive future growth thorough a focus as oncology biosimilars, women healthcare and OTC. And again I think we have some really descent strategic relationship with the local partners, will rely upon niche portfolio because this is some nice -- depending upon the mark-to-market and you would expect that will have some JV, some partnership in some of these markets we may not did on our own every market but we will like to deploy these efforts. So, we see this is a great opportunity of what we have shared with you from the operating platform the R&D pipeline and what we have acquired putting at the use for these markets.

Tony Mauro

And as Rajiv said these markets are really about branded generics and OTC and how we continue to look at our own legacy business our portfolio in layer these opportunities on these markets.

Rajiv Malik

So let's invite Jacek over here to tell out the data transformation, really this is a huge change over the last three to four years when we last met. Europe has undergone a huge transformation and so as Japan.

Tony Mauro

And maybe before Jacek start just to give you and he's very proud of -- we are very proud of what this transformation will show. And he will give you some examples of countries where have existing leadership and how we are going to maintain that as well as great opportunities to grow as well.

Jacek Glinka

Yes, thank you, Tony. So when I joined the Mylan that was in 2015 actually. We were still having a good presence in Europe, but I would say it was not that relevant in many of the campuses. We covered 25 countries, but many of them our market share was insignificant and we are focusing predominantly on generic business in hospital and pharmacies and in some Central European countries, promoting to physicians. But I was scared it was not sufficient in our recovery it was not full, and we were not benefiting the other channels which are important to be successful in these markets.

So, today I could say I am one of the most happiest people at Mylan because what we have created the transformation that you have experience in Europe is really fundamental for our future success. You could see that we not only grow our relevant in Europe and in the countries growing in some of them 200%, 300%, 500% the market presence but we also substantially differentiated our business moving into newer year such as brands increasing our presence in the hospital business, moving into OTC and of course strengthening our presence in the generics and branded generics segment. So you can say that today Mylan in Europe has full commercial capabilities to commercialize on adding product opportunities requiring presence in all existing channels being hospital pharmacy, OTC being physician channel or patients channel with OTC products.

So you can say why this is important in Europe. For once, Europe is a very complex and diverse region. There are virtual no two markets which would share the same pharmaceutical environment. Even though many of these are right now members states of European union even these members set conference would have different pricing system, different reimbursement system they also have different regulatory requirements regarding labeling packaging they would have different languages sometimes different currencies and of course different tax systems et cetera. This is why you have to tailor or made commercials strategy to the unique needs of the customers in this countries and this is where this many capabilities that we have acquired over the last three years are very critical to be able to adjust our commercial platform to the needs of the consumers in relevant countries.

And more to that this environment is very dynamic, so it's changing almost every month in every country and this is where you need to maintain flexibility to adjusted your commercial infrastructure once this changes in the markets or changes our opportunities in our portfolio are coming to life. So again I will walk you through a couple of countries where we will show how U.S. has deployed his one Mylan commercial strategies. I will start with the largest and most successful one which is France.

Many people already referenced France as our success story and clearly this is one market where we could say Mylan is a truly leader of the pharmaceutical markets overall. We have the number one position in volume, we are number three in value in the total markets we are leader in the generics market, volume and value we are number one in hospital generics, we are relevant player in OTC, and we have a very strong presence with our branded portfolio. So, you could say the green case of being really omni-present in the country and this is really a very strong asset base that we would like to average moving forward.

In France, we have a very strong presence on the branded site and this is relevant to understand that through this branch we are using a relevant relationship with the consumers and with the physicians which is very critical to further expand on the branded opportunities. And we have excellent coverage of the channels. You see we have almost 400 sales representative in France and our coverage is really second so now we cover 100% of pharmacies, we cover 100% of hospitals, we cover many relevant therapeutically areas physicians where we promote our products.

So, how we are going to leverage these assets moving forward I think that there is a lot of opportunities across all of the channels. In generics we are clearly a market leader and we have 20% market services 30% when the 8% it's almost everywhere the substitutable products has a Mylan log on detect. It's a very powerful position which we have created through a passion of dedication to new customer needs. We have been in France portfolio which is second plan. We cover more than 90% of generics substitute products in France, which gives us number one position and we cover 100% pharmacies as I mentioned many of these pharmacies directly through our sales representatives.

These matches were excellence supply chain platform that we have built in France, which Rajiv has referred to, but also to the fact that in France we have dedicated manufacturing facilities in Chatillon, in Meyzieu and the packaging plant Rio, and this is all coming to work together and it is going to support us in maintaining the leadership position in generics and more to that we will leverage our strong position at the pharmacy to support our business other business lines. Like OTC products, like branded products which are mature and require support at the pharmacy level or all such cost with our products which are initiated at the hospital level but then they are carried over the retail markets and therefore their pharmacy support is so critical for them to perform.

On the branded markets, we believe that there is still opportunities to bring together the portfolio of the Company that we have acquired especially the areas like respiratory where we can on one hand execute on the consolidated portfolio of the brand but also look forward to bring new products in our pipeline like generics heart. And therefore build the really strong position in respiratory in France. And in hospital we would like to leverage our very strong presence to prepare ourselves for the coming launches of the biosimilar products. So I cannot be more excited about opportunities in France.

Rajiv Malik

France, we were always excited about our leadership in generics. But with this acquisitions of Abbott and Meda, I think we feel much better place with the addition of this Rx and OTC because it's not about just -- it's about their relationship has gone to whole in other levels with pharmacists and all that. And it's investment in the portfolio plus 90% coverage of return on this. It's about the supply chain maintaining those three manufacturing sites around that key market, and deep, deep presence whether a coverage 100% coverage of hospitals and 100% coverage of pharmacies, a great case study of a building the relationship in this markets.

Jacek Glinka

Very strong, French people we'd called it super cool, which more of less being awesome in American English. So let me take you to the second country which is at the same time our second biggest affiliate in Europe, Italy. We are the number second in the total pharmaceutical market in terms of volume. We are also second largest generics retail company in the market, but over the last year IMS was reported Mylan in certain quarters and months of the year as the market leader. So, we really hoping that maybe this year would be transformational to us in Italy also in this respect.

We are well presented in OTC and we have strong emerging presence in the hospital. And we have a very strong OTC and OTX brands in Italy because Meda and Rottapharm which was acquired by Meda were originally very strong on the Italian market with such products. So we would like to use this heritage and again excellent coverage in Italy. Italy and France are the countries where our commercial infrastructure is really strong, we could see for Italy, we have almost 500 reps covering 100% almost hospitals, 75% pharmacist covering many important therapeutically areas like cardio like gastrology and neurology, which are important vital for our key brands to be supported.

Very important thing for Italy is that we have 75% coverage of the pieces, which is unique and the best performance for all affiliates in Europe. Why this is important, because in Italy on one hand we have a very long portfolio of mature brands which are not and then more requiring a lot of promotion for with specialist. But they need to be promoted at the GP level and at the same time we have a very strong portfolio of so called OTX products, which are by regulatory standard OTC product. But they require promotional or endorsements from the physicians. Because these are such OTC products like for example pediatric or gynecology products where patients would like to have doctor's endorsement before choosing brand.

So, this is where our strength is in Italy covering 75% of the piece is by industries standards are very good coverage. So, in Italy, we would like to use this trend at the pharmacy level which is right now reaching 75%, reaching and this strength at the GP level to further promote this portfolio, the dimension OTC, OTK and the branded generics products. We would also want to expand in Italy our presence into new therapeutically areas with our brands consolidating the portfolios that we have in women healthcare and looking for opportunities in the dermatology.

Women's healthcare we have inherited the good portfolio of products from Famy care from Meda, from EPD. So, we consolidate them together and we hope to bring in them to the market and the so called umbrella brand, but I will describe that maybe during Germany presentation. And dermatology, we are also looking for opportunity to bring some products from Renaissance into Europe. And like in France you would like to use the strength in the hospital business to prepare ourselves for the launch of the biological products.

UK, the third market that I would like to speak on, we are not that strong like Italy and France, but we have a good presence in generics we are number three and we have the good presence in OTC. And we are market leader in some therapeutical areas where we have strong brands, like anaphylaxis with EpiPen. Like Creon in pancreatic enzyme replacement therapy or like our HRT portfolio. So, we would like to leverage that in adding such product that we have in the pipeline our portfolio of Mylan and promote them to the same therapy, therapeutical audience which we have a very good coverage you can see on the slides that we cover 100% of cystic fibrosis since we cover a lot of specialist in this relevant therapeutical area. We also hope that in the UK we would be able to leverage on the huge success of the Sirdupla launch last year and adding Dymista and EpiPen you would create a powerful respiratory and our differences.

In the OTC segment, we see that we would use the consolidated power of our generic portfolio brands and OTC brands to strengthen our relationship with the pharmacies and whole segments. It is especially important in the UK on the generic side, because UK market is very similar to the American market, where generic products are promoted -- are substituted on the IMN level and the market is dominated by big wholesalers and big pharmacy which have a very strong power.

So, this is why we in this market in the UK have 100% coverage of wholesale as an pharmacy change and we have no coverage of individual pharmacies unlike in Italy or in France. Very important component of our commercial infrastructure is the TCGs which is Transfer Clinical Commissioning groups these are the people that are in the regions responsible to manage the healthcare budget and double up some of sort of formularies or driving the prescription habits of the physicians. There are more than 200 such TCG groups and we right now with our consolidated sales force discover 100% of this people which gives us the good platform to support all our branded products, which required prescription by the physicians.

In Germany, which is the last country that they will cover, it’s an interesting story, because in Germany few years back we are very small player. We only did the legacy generics business on the tender market. We didn’t have any infrastructure, only people responsible for supply chain regulatory no reps at all, no marketing people. Since then we have evolved into Mylan today which is much more relevant player, we have grown more than five times our size and which has substantially broadened our commercial capabilities because we have diversified into the brands. We’ve made an EPD product. We have diversified into OTC and into the hospital. So right now we cover good portion of the hospitals, we cover 45% of the pharmacies and we cover again many, many different specialists and GPs in Germany, which gives us very good starting position now to build the growth for this market.

Again, Germany is the largest pharmaceutical market in Europe. So with this platform we hope to get a decent share of that market and we also think about using this market as -- as a pilot country to test our umbrella branding approach with women's healthcare portfolio, which we had consolidated through Famy Care, Meda and EPD products. All of them being relatively too small to be promoted individually, but as a group, this is a very strong portfolio and we have launched my way umbrella brand name last year, if successful you launching this in other countries which are relatively in line for the outcomes of that umbrella strategy by our product.

Germany is a great country from our opportunity point of view because despite having vertical integration and very deep portfolio, we couldn’t do much in generic space because, we didn’t have any portfolio, we didn’t have any reps and one thing we have missed is a despite you have products unique promotion at least for the launch of the new products, that’s what we see and that gap being filled us now, the portfolio we have, the team we have we see generics also getting to that very different level and with this all Rx and OTC being around that, this businesses reintegrated and we are very excited what lies ahead in that.

So, we share with you several operational aspects of our business and I -- when I started I talked we believe we are uniquely positioned to leverage this growing demand of medicines across the globe, and I will see it in a different way, why we believe so. So there are certain perceived industry issues and this is how we respond to that in our own way. Let’s talk what generics pricing environment. So then you looking to the broad diversified portfolio, which we shared with you, that market penetration, the durability, the robustness of what Tony shared with you that slide he showed about the U.S. popular. More importantly than robust pipeline and we always we shared with you we looking at not more than mid single-digit, when you look into globally generics business, vertically is integrated scalable efficiencies.

We talk about the policy dynamics. Yes, our leading Gx business a proven solution to rising prescription costs, 18% of U.S. products made in the USA, manufacturing facility proximity to several of key markets. The customer consolidation, we said, it can be a threat, for some it can be an opportunity if you translate that to the strategic level. And we believe our global scale ability to compete and meet the volume for the market products is a unique feature and service and reliability has always helped us to build this relationship. We are not relaying on one market and one product, as we talk again and again. We had a diversified and differentiated assets like 25% relaying on U.S. market, 31% on European market and rest of the world. 7,500 marketed products, 165 countries, six $1 billion therapeutic franchise and strong presence now in Gx, Rx and OTC.

We are investing in, to bring forward and commercialize the complex products. We shared with you the biosimilars, the insulins, the respiratory programs which we have and the capabilities which we have built over the years. We are engaged with the regulators, we stay close to them, whether it is FDA or anywhere else in Europe and all that because that’s very important part of our engagement. And then industry underperformance, yes, or give it, what we have performed for over 10 years, we have executed upon. So I feel, in this, and I’m very confident that state that we are very uniquely position for the future to leverage opportunities which come our way. But that I am going to invite Ken Parks who is raring to go, our youngest member. So Ken, please. And thank you very much.

Ken Parks

So, I would believe youngest, maybe newest but not youngest, but that’s okay. So started out saying, I am the newest member of this management team. So coming in as the finance person, so what’s the first thing that I have done is spent some time taking a deep guide into the financial dynamics, what we call is uniquely diversify and differentiated organization. As you start to do that, what you say. Well look at what happens since our last Investor Day and 2013. We delivered strong solid performance against all of our financial metrics. We had a 17% compound annual growth rate on revenues, there’s no blip in that line, that is a continual path up. 23% CAGR on adjusted EBITDA and a pretty impressive 19% CAGR on adjusted fully diluted earnings per share.

Now as we look at our most recent performance that came out on our press release today. You can see solid performance and not only the fourth quarter of 2016, but also the full year and you see the numbers on the page 31% growth and revenues in the fourth quarter, 18% growth for the full year. Take you over to the right hand side and a couple of comments 29% growth in adjusted diluted EPS and an impressive 14% growth in fully diluted EPS for the year. It’s important to point out that how though we do that is we continually focused. You heard all day long about the differentiation of the business. You heard about the focus on the operational part of our business. And while no matter what is going on in the external environment, what we have done stay focus to our operational performance and our product pipeline.

So if we start peel the layers back, 18% growth for Mylan overall. Low-single-digit growth on the base of business and the rest of that coming from the acquisitions of Meda and Renaissance and a little carry over from EPD. But low single digit growth there and if you start to look at the segments and as you remember in the third quarter we announced that we would be expanding our segment disclosure. Matching it up with actually the way that we manage the business and as you've heard the leaders talk today this ties to how people are managing the business and we're looking at the pieces as we bring all these acquisitions and channels together. So North America grew 10% year over year, Europe grew 34% year over year on the top line and the rest of the world grew 16%. I can tell you that consistently through that each one of the segments grew low to mid single digits organically or on the base business and each of them had a contribution on top of that from the acquisitions that we talked about.

So good solid performance against in all three segments against the top line, now the chart that heather showed you earlier, I'll point out a few things here. Look you see the top row North America, first of all say that our expanded profit over the last three years from our new segment disclosure which you'll see in our K shows that it didn't come from just one place. It came from all three of our segments and that's one of the reasons that we thought is very important for you to see the business this way, it's not linked to just one part of the business. You see in North America that we had expanded profit. We've been able to maintain profitability levels at over 50% through that period. That's benefits of new product launches, volume expansion and offsetting pricing erosion and we've said it again in each one of our previous calls as well in the previous discussions. What we see in the North America generics business is similar to what we see around the world which is mid single digits generics pricing erosion.

Europe you heard Yasid talk about what's going on in several of his key markets and what you see here is not only significant expansion of profit but significant expansion of profitability over this timeframe. Profitability grew from 9% to 22% in the last two years. Similar story for rest of world, 21% CAGR, twice that rate on operating profits therefore driving profitability from about 12% to about 18% that's not only due to the acquisition impact which they all had but it's also due to what we've been talking about the Mylan integration and the leveraging of our foundation business at Mylan. So as we look at 2017, what is going to be, well effectively if you take a look at these numbers it’s a continuation of what we've done over the last several years. You can see that we're expecting total revenues in the $12.25 billion to $13.75 billion that's about 17% growth at the midpoint of the range.

Diluted EPS to expand from $4.89 in 2016 to a range of $5.15 to $5.55 and then free cash flow expanding again to between $2 billion and $2.4 billion, now there's a few pieces in there to point out which is if you look at the midpoint of the gross margin range you will see that we're expecting a little bit of margin pressure year over year followed about 50 basis points from '16 to '17 at the midpoint of the range. While we're getting the benefit of volume and new launches we also are expecting some gross margin pressure primarily from the impact of the EpiPen changes, and I’ll give you a little bit more color on that in a minute.

We will continue to invest in the business and R&D obviously we are proud of the pipeline, we will continue to invest there. We are going to continue in investing capital expenditures, we have a range of $400 million to $500 million in CapEx and we do expect a slight upward pressure on our adjusted effective tax rate this year in 2016, that rate was about 16%. You can see we are estimating it's can be between 16% and 18.5% and that’s primarily due to the components that where profits will fall with our new and broaden portfolio.

Now one thing and I think Heather followed these numbers earlier. We are also giving a look at the segments, so you are now seeing profitability by segment, we are giving you a look not only at Mylan overall growth but what's going to happen in each one of the segments and to repeat the numbers, we expect North America to growth more than 5%, Europe to grow more than 30% and the rest of world to grow more than 20%.

How does that bridge, so 11 -- almost $11.1 billion of revenues in 2017, we do expect a positive so contribution from volume, you heard Rajiv talked about $850 million with a new product launch revenue. And then a significant impact from pricing erosion, now that’s got really two pieces on it. One is the impact of the ongoing low to mid single digit rate of decline in generics globally as well as the impact of the EpiPen changes. In addition to that we have got the incremental and/or we call it carry over impact of the acquisitions that we have completed in 2016 of Meda and Renaissance. And finally there is a little bit of incremental BD that’s within our plan business development, to get us to the range of 1250 to 13750.

Now taking you through the EPS, you see the contribution from the sales growth, so between the contribution of volume and new product launches partially being offset from pricing. You can see that there is still a net positive contribution from sales growth. You see the impact of what I talked to you about earlier the 50 basis points of margin rate pressure at the midpoint of the range. The carry over impact of the incremental Meda and Renaissance on a full year basis along with the synergies that are rolling into the business from not only the integration of the acquisitions, but as Rajiv told you the Mylan integration overall. Small amount of BD contribution and then we do have the full year impact of interest, passes and share which primarily is driving the funding of the acquisitions and then we invest a little bit more in R&D.

Now couple of things, I have talked about EpiPen changes a little bit along the way. I’ll just give you some numbers directly because I know that everybody is trying to understand the dynamics of what's going on there. Within this set of guidance, and within this outlook, we have built in $400 million of profit impact negative profit impact from the changes that are going with EpiPen. It's about $500 million approximately at the gross profit line and then we scale back and reset and change the business to post structure as we move to the AG and that offsets a little of that, but we do have a $400 million impact in these numbers from the EpiPen changes. With that change, I'd also tell you that in 2017, no individual product will account for approximately 5% more than 5% of sales. So you get the order of magnitude that’s happening with EpiPen, yet we're still moving from $4.89 to $5.15 to $5.55.

Lastly on this page, couple of comment on calendarization, we don’t provide quarterly guidance, but what I would tell you as you’re thinking about how 2017 should be calendarize our how you should think about it. If you think about the relevant, relative contribution each quarter of 2017, to that total it will look pretty much the same as it did in 2016. So as you think about modeling just keep that in mind as we move to the year. And will obviously as we always do update you on that, as we move to the summer the moving variables in the business including product launches and pricing and all that other things that happen.

So with that bar placed with the graph, we continue to be committed to our $6 adjusted diluted EPS target in 2018. If we take 2013 to 2017 midpoint that’s about a 17% CAGR in that EPS number over that period of time. And you can see that to get to 2018 from that midpoint it’s a slightly lower growth rate to 12%. Now what is think is also important is not just that I read you the words and under the roadmap to $6, because I can't do adjusts makes upon what you heard today but effectively what gets us there continuing exactly what we're talking about all day.

So the new product launches Mylan integration business development tax rate and continue diversification of the portfolio. So we continue to be committed to that $6 adjusted diluted EPS target in 2018.

Now I want to jump over for a minute and talk about something that’s also extremely important which is our balance sheet. Left-hand side of the chart shows our free cash flow generation, adjusted free cash flow generation, each of the last years since 2013. It's grown from $900 million a year to over $2 billion a year. Do the math and that’s about a 25% compound annual growth rate so solid growth there. That married up with our maturity schedule on the right hand side of the page, which has relatively little near-term debt repayment requirement. Gives us the flexibility to continue to deliver, which we've told you as one of the key things that we're focusing on right now with our capital redeployment strategy while retaining financial flexibility for additional business development and to continue to invest in our business and our product pipeline through R&D and CapEx.

With that, we're committed to our investment grade ratings, you see our leverage ratio is in the bars our convenient limit is in the line a little blip up in that convenient limit, because not is was a qualified acquisition under our terms and so therefore that gave us the temporary increase to 4.25 but the reality is, we feel good where we are because even today with Meda OEM for happy year we're almost that within our range and we expect to continue to drive that down to 3.2 times leverage by the end of 2017, and we remain committed to our long term average leverage ratio target of 3.0 times EBITDA.

So, as I start to wrap up here, I can't help but show this chart again, right, I mean the title is extremely important; it's a decade of execution and performance but it was all done while investing in the business; so you see the 22% CAGR from 2008 to 2018 target on the adjusted diluted EPS, but don't forget the points on the top left. That was all done while investing $5 billion in R&D, $3 billion in capital investments generating $11 billion in cash flow over that period and maintaining a strong investment grade balance sheet, so execution, performance and investment.

Now, I said I was the newest member of the team, did a deep dive, kind of thinking about what are the financial dynamics of the business, couple of things. One, what do I think the critical variables are that will unlock incremental shareholder value out of Mylan? Number one continued execution. Luckily, and I think it hopefully had convinced you a ton of our ability to do that, that's why I'm leaving this chart up here while we talk about it. We're executing; we've executed with no matter what is going on in the external environment. We've executed with the changes in EpiPen, we know how to execute and our intention is to continue to execute. Number two, it's about being able to give investors and stakeholders better and complete visibility into what our business is. Look at 2013, the last summer we were in front of you, it was a very different business than what it is today. Rajeev mentioned the numbers a few minutes ago. Over 50% of our revenues come from outside of North America now.

About 40% of our revenues come from products other than generics, so a very-very different business, more diversified, we say uniquely diversified and differentiated than it was a few years ago, and we think what's important is that we get in front of you and explain to you and let you see that and that's what today it was all about. You see pipeline, you see the talent, you see the execution; you see all the pieces of this puzzle. Third, what I would say is we will focus on building at this point in time an even stronger and I'll call it world class Investor Relations group; we've a good group today. What do we need to be? We need to be communicating this with you consistently. We need to be listening to you. We need to be carrying messages back, so you'll see I think that's the third element of how we unlock shareholder value over the next few years.

Why do I think that's important because if you look at how Mylan trades, and you guys watch it probably even closer than I do, we trade like a purely U.S. generics business. That is not what we're. The chart says it. You think about our -- if you just start to size the pieces of our business, Europe, rest of world, we have a bigger base in Europe than many of the European pure generic pharmaceutical companies when you start to put the numbers together. They trade at 15 times multiples, Indian businesses are peers trade at north of 20 multiples.

What I want to do is make sure what we want to do as a team is to make sure that we have the information in front of you for you to understand that we are differentiated. We will continue to execute we will continue to communicate, we will continue to listen and we will continue to drive in a north value out of these assets and out of the stock for you and all of our stakeholders. So that is what today is about. We are going to take a short break and we will then come back and take your questions. Okay? So I'll ask you to take 10 minutes, we will be back in the room and we will go forward. Thank you.

Heather Bresch

Well, welcome back hopefully you stretched your legs, grab something to drink, take a bio break. And I hope I was up to my promise at the beginning of the afternoon that this was really about Mylan being able to one teller story. Who we are today? Because we are very different since the last time we were in front of you in 2013. To really showcase our management team and if it worked out everybody would have been presenting, but in the order of trying to keep some semblance of and orderly presentation, you at hoped we've got together real taste and a little bit of teaser of the depth and breadth to this management team. People who have been with us for years, decades; and people with us that are new to us, as Ken said, the newest member of the team which does not feel new at all.

So with all of that who we are today more importantly this is just a beginning for Mylan. You look at the infrastructure like I said the short-term execution married out with our long term investing in this business for both organic and inorganic growth. I think as we said despite on this chart but more importantly just a beginning of where we are headed. And the next decade of growth coming from again organic and inorganic, these investments that we have made you saw the impressive Advair the generic Advair, both the facility and the product. We have invested over $700 million in that product to bring it to market. So we believe it these differentiators that truly set Mylan in the class of its own.

And I think as Ken summed up everything from building upon Rajiv's showing the unmatched operations platform how, we are approaching our commercial markets, where our strengths are where our opportunities for growth is. It really is about being as differentiated and diversified that can absorbed the volatility in any of the markets that we are participating in to manage this now global business and continue to deliver on these financial commitment. And as I said before we believe we are best position to not only serve patients and their needs, but deliver on our commitment and like I said tee up this next decade of growth for us.

So, with that, Chris is going to our MC or Q&A segment.

Kris King

Thanks Heather. We are going to take about an hour for Q&A. We have mike runners on both sides. We would just ask since we do have people on the webcast and on the phones to ask a question please state your name and your company.

Let's start with Mark.

Question-and-Answer Session

Q - Mark Edmond

Marc Goodman from UBS. So Heather, when you acquired Meda recently, you -- management indicated that we have got everything we need with respect the footprint now globally. So we don’t really need any more what large deals it's really just going to be niche deals for the next couple of years I think as I wanted to note that was still the case and how we view that and the BD that was baked into the guidance I was curious if you could comment on that. And then second question is what can tell us about what EpiPen in the fourth quarter with respect to the brand versus the AG that you're selling and if the net prices exactly as you set when you were in the DC? Thank you.

Heather Bresch

Sure. So a great question. And I think that as you look at Meda what we've said when you look at the diversification that we laid out now by geography as well as by channel, having we have had the legacy Gx that critical math. We had continued to build upon the Rx space platform our legacy, from Abbott and then with Meda and then importantly the OTC space. We had come before and said that, that diversification we believe is just very critical it's critical that how we approach and see that synergy of how we go to market and meeting the most of that customer and patients. So when you think from an infrastructure perspective we still do believe that we now have that commercial footprint, the infrastructure that we need so now continue to take our products and build these markets as Rajiv showed some of these emerging and extension markets that were still very, very small players and I'm figuring our partnering, going, doing it alone they are taking these products into those countries.

I think with that being said we absolutely our contently still looking. You look at the Renaissance, so we bought in a great set of assets to bring into those U.S. marketplaces. We showed that we still have a lot of opportunity here in the U.S. alone with dosage forms and products that we don’t have and as we look at what's happening around us and the environment of healthcare I would say it's very, very much a buyer's market we can be very choosy with our capital. I think there is a lot of great assets that are fulfilled that would coming for sale all around the globe. So I can assure you we will continue to be disciplined in our approach and committed to our investment grade balance sheet but we have a lot of financial flexibility within that. So the BD that you saw and therefore 2017 is not unlike really any of the years. We have targets in there for products deals and just like we announced in the beginning of the year, so we will continue to do those type of deals and I think if the right assets come along I promise you we will be participating in it.

As far as EpiPen goes, I'll let maybe Tony comment a little bit on the quarter, but what I would say overall I think that as you think about and it was important for us to when I hope showcase that EpiPen is an important product it will -- I think it's got it's an important brand I think it serves an important function in our healthcare system, and we see that continuing. With that being said we are so much more than EpiPen and we're so much more than even just the U.S. market and I think the point as more than half of our sales being outside of the U.S. I hope where they starts to paying a different picture of the assets we're managing the leverage that we have does not only continue to build but to continue this diversify and looking for other ways just further that diversification.

So we thought it was important enough like 10 point about what our guidance absorbs from what EpiPen did, and I think importantly looking forward in 2017, we took a very conservative estimate. I think the dynamics between that brand in generic will continue to play out just because as you guys know as I said earlier it's a complicated system. So as you have some pull through depending on plans that would still be around that brand but we're doing everything that we can to promote to make available and accessible the generics that we put into the market.

Tony Mauro

And maybe just to add to what Heather said I think, if I think about Q4 with our launch of EpiPen AG, any value we receive from that certainly we have the exact opposite that happened with the pull down in the EpiPen brand inventory. So, I would say they offset each other certainly looking forward to that full conversion here coming in the 2017.

Kris King

Randall?

Randall Staincky

Thanks Randall Staincky from RBC Capital Markets. Just two questions, number one, generic Advair to be huge opportunity for you, and this year I think you mentioned the July launch timeframe. So can you just talk about if it is risk adjusted in numbers, how do we think about that? And are you assuming competition from Hikma?

Heather Bresch

I'll just start at high level and then Rajiv or Ken anything you want to add. So Randall hopefully you're one of the faces that have been with us for a long time in the audience since '08. And hopefully you guys realized that as we talk about to your point these important launches and then are. But that we have continue to do what we've always done which is probability way these launches, probability way the products and the role they play in our portfolio, not to bringing up Copaxone. But if I go back and use that as an example of an important product the couple of years ago, and when the approval date and time when we had hoped, we were able to manage and offset that. So what I would say as we haven't treated Advair any differently than we have in over this last decade as we continue to bring important products and the role they play.

Ken Parks

And yes and we have more of Hikma, we have more of competition in this numbers.

Kris King

Elliot?

Elliot Wilbur

Thanks. Two questions for Rajiv on the kind a get this right. Is it would sale in hub, specifically on the supply chain itself. How much of that is actually fully within your control? And the reason I ask the question obviously there is little high profile products where, and -- expects you receive approval and ultimately there is some kink in the supply chain somewhere at nobody having that existed and don't get approval for?

Rajiv Malik

So other than API everything as season or supply chain, other aspect in this device and in fact seeing filling fact what you saw. So what you didn't see was the device manufacturing which is also within our control the device the supply chain is within our control. The only thing which is not in control is an API.

Heather Bresch

And again I think just to add to that Elliot, that again, when we talk about our investments as I said over $700 million we've invested to bring Generic Advair. And we believe that as much that barrier to entry, it's not just like adding as Rajiv walked through even within oral solid dosage, the complexity of all the different kinds of tablets capsules that you can have, it still doesn't reach the same level of complexity as needing a dedicated plan or facility to make the product. So again that's where we continue to balance that taking control of our dose as Rajiv said manufacturing now 80% of what we sell.

Kris King

Chris?

Chris Schott

Great, thanks. Chris Schott of JP Morgan just on the Advair theme. Talk a little bit about capacity, do you see any capacity constraints here to the extend you did approved and can launch mid-year. Should we think about that being a rate limiting factor at all? Second was coming back --few,

Heather Bresch

Like it's not where like the call, we'll let you take a breath and come back with the second.

Rajiv Malik

No, we don’t' see any capacity constraints but we're not shooting for 100% market but we're shooting of our fish at which Mylan always can get. And we are very confident, because you can't, you have to appreciate. We cannot have a product out there such as a device and then our patient sign out of supply because of some supply chain restriction. So you respect us to have a backup, we have back up in this case so that there is no disruption on account of slighting.

Chris Schott

Second one Advair, can you talk about that June, July is there anything you're hearing from FDA that suggest that you could get I think a delay.

Rajiv Malik

I knew I'd get this answer that was up front. We had a lot of resubmission and for solution engagement. And at this time anything we know we share with you is based on what we see and there is nothing that we don’t, we are not confident on our goal action there, but I know it’s a complex product and it will be maybe very ambitious for us to see that we will going to get it on March 28. So that’s why we are given ourselves that drove.

Chris Schott

And a one final quick one, just coming back to the BD kind of bar in the guidance. Do you say anymore color around just how large that is was that the scale I just trying to get a sense of when we think about those numbers, that you're deals was announced how much should we be thinking about that you reflect in this guidance?

Rajiv Malik

Well, first of all I will broke the acquisition bars apart, so you could see that the completed acquisitions is a carryover impact and you see that relatively two scale that is a much smaller bar. And as Heather said, other than last year when we build on a much large place holder for acquisitions because we’re already talking about some larger ones. This is kind of working the pipeline like we always of niche bolt on or product acquisitions that are coming in. So, it’s not a large, large number.

Tony Mauro

I can add on that, it's not one product, every market has identified several opportunities that we keep on working and if you're not close to that opportunity like Cold-EEZE you put that in that subject. So, it's not one product, it’s a multiple product for multiple markets.

Rajiv Malik

And we always and not the labor but the only thing else I would say is that within that bar it doesn’t mean that all of that is somewhere out and hasn’t been thought about. There are things that are constantly been look at there are things that are more mature today in the process. So much of that has been if you want to call it identified target or whatever you want to characterize it, it is a set of things multiple things that people are working on.

Chris Schott

Thank you, great presentation. Ken for you if there would have be a border tax adjustability in the U.S. for the tax reform. Can you walk us through you're manufacturing of drugs that are sold in the U.S. What portion of that is manufacture and then just if you could talk about the impacts of any usage?

Ken Parks

So, to start with what we sell in the U.S., 80% of the products we saw in the U.S. are manufactured in the U.S., okay. Now, there are components within that API, most API comes from 99.5% or more comes from the outside of the U.S., So, there is a piece of that will be coming in across borders. Your question around border, we’re seeing close to but the reality is as just like as you watch it there is a very little definition you had about what that means, what portion of the value that’s move across the border is going to be tax just the component and whole thing.

I guess what I would go back and say if we get through a situation a true corporate tax reform with a lower corporate tax rate even if it's got some appropriate things or other items such as border tax, such as other items, we believe corporate tax reform is at a minimum neutral to us, right. But I think there is a long path around understanding the total border tax impact because it hasn’t been define anything more than goods coming into the U.S. would be tax that some rate to be determine. So, I think all I can tell is we’re staying close to it as we have identify more out of our business, we’ll keep you up to speed. But I think there is a long path to get to the end of that challenge.

Heather Bresch

And I would just add that, but what -- I obviously agree with everything, Ken just said from an external perspective, but we do believe given the fact that we have one of the largest facilities in the world here in the United States and West Virginia and as Ken said, we manufacture 80% of what we sell here in the U.S. that were better positioned as anybody with the amount of doses that we’re putting into the U.S. market.

Hima Inguva

Thank you. And this is Hima Inguva from Bank of America on behalf of bondholders. Thank you for reiterating commitment.

Rajiv Malik

Thank you. Yes.

Hima Inguva

Great. And then Heather, on BD around OTC, you have said in the past publicly no interest in Perrigo just wanted to hear your thoughts around that?

Heather Bresch

Sure, we said obviously at the time that we talked about the Perrigo transaction, we believe that strategically what’s we could do together in that space, it wasn’t what they were doing on their own and in fact we have said that we believe from a standalone perspective that there were some that was an all that sustainable it was more of a we were going to be able to do together. I think after that opportunity that didn’t happened. What we then said is lot of different ways to accomplish the point and I think with our recent Meda acquisition and we continue to see a lot of great products out there for sale like we just we announced the Cold-EEZE is a good example of products that are available out there. So yes, we believe that we now have a very good and defined roadmap for how to continue to build our OTC capability.

Kris King

Is that Jami I see?

Jami Rubin

Thank you. Jami Rubin with Goldman Sachs. Just a couple of questions, Heather, maybe for you first on just the overall generic pricing environment, we’ve had all the generic drug companies reporting our first quarter get 2017 guidance. And so Mylan is somewhat of an outlier in talking about mid single-digit declines in generic pricing versus many of your peers, who are seeing much worse pricing and I’m wondering if we are mixing new products with base business, and when you talked about mid single-digit decline is that excluding contribution from new products and maybe if you can just comment in general why your base business maybe experiencing less pricing pressure than your competitors, is it just the complexion of your products and how much of the factor to new products plan to them?

Heather Bresch

Sure. So Jami, thanks and I hope that perhaps coming out of today and sort of an outlier we are above weather. We have been communicating and discussing over the last couple of years, Mylan’s differentiation and diversification, one just within our generics business, but now from a geographic perspective. So when we look at talk about the generic price erosion mid single-digits as we have the last couple of years and said that’s what we see in ’17, it’s based on what I said at the beginning.

Our business model, our business model has been high volume, new product launches. And we have completed in that competitive environment. You saw the chart that put up about the durability of our product portfolio, more than half of our drugs are have been on the market for over 10 years. So when you think about the U.S. generic utilization at 90%, it’s the Mylan’s of the world that step in there and fill that volume and continue to fill that volume, year-after-year from commodity products, the complex products to then launching like a generic Advair.

So the robustness across our 635 products and a highly competitive environment allows us to do what we do and that is managed this very large business, I hope that today, as you -- as well as the realization that we aren’t U.S. centric, we’ve got a global generics business and we’re able to leverage this global platform in ways that there is not many other companies out there at all that can do. You see niche players from specialty to generics, and yes I believe that when you have times like this we have seen these cycles before. Where you see the cycles of that hypercompetitive external environment, if you are limited to a pretty small area whether that’s geography or portfolio, you are going to take a harder hit.

What we were so excited about getting here today, and I know it’s been longer coming then we would have wanted but we are here and couldn’t be more excited about Mylan’s portfolio, why we are a leader truly in the space and we believe in the class of ourselves. I loved your headline, good house in a bad neighborhood. I would like to suggest, we are in our neighborhood all by ourselves and the best house on the street. So I think that the opportunity, this is the beginning for us, to leverage this. And I think it is all of those things. It is the multitude of products or pipeline, the infrastructure that we put together, our operational platform or vertical integration. It is everything that you have seen on this chat for the last 10 years that is allowing us to do, what we do and really distinguish ourselves. As truly giving and playing a significant role in healthcare and in delivering healthcare.

Jami Rubin

A follow-up question. On I’m not going to, Wixela, Inhub, by the funky name? Why do you need a name for a generic? The other generic with kind of a funky name, Glatopa, took very little share from Copaxone 20, maybe there were other circumstances. But what is, A, why the name? B, what is the right analog for thinking about generic Advair? Is this, how do we think about the opportunity just given that this is kind of unique? Thanks.

Heather Bresch

Well, I guess, I’ll start with, I certainly, it’s not just all about the name and I don’t want to be compared by other whatever funky names as you say or out there. We see an opportunity generic Advair being kind of the first as we think about these complex products come in the market. We think about the complexity of the supply chain and our ability to work and differentiate ourselves in that. So I’ll let maybe Tony or Rajiv go a little bit more into detail. But the reality is we see an opportunity that yet from a substitutable perspective we have got the ability to pull it through as an AB rated product. But we also have the opportunity, because of the services around the product and that interaction both with the physician, the patient, the medical communities that we have an opportunity to distinguish and differentiate ourselves. And more importantly our product by the features that Walt pointed out which we believe are unique to us.

Rajiv Malik

And there is -- because it is a device and the patient is moving from a device to another device, we believe stickiness in this case. And we have several other analogues, we have a product like Zulin that is a patch which is a substitutable product and has done pretty well as a product model. But also we believe our respiratory sales force will be carrying something when they go and talk about Dymista they will have something in their bag just to remind those doctors about this science based product.

Tony Mauro

Yes. I was just going to say, and Rajiv had said it really it is a multifaceted approach to this launch where we are going to have our traditional pharmacy partnerships to ensure substitutability and conversion. But at the same time we have got a 300 person sales force calling on respiratory that plays perfectly into ensuring physicians that there is no blocking, there is an opportunity for us to share that we can bring an affordable product to market and drive conversion the right way to show launch success.

Liav Abraham

Good afternoon I'm Liav Abraham from Citi. You don't talk much about generic Copaxone but given that's at maybe a little bit more than material opportunity theoretically over the near term, interested if you have any updates there since your last update on Q3 any interactions with FDA and do you assume a concomitant approval of 20 mg and 40 mg, thank you.

Rajiv Malik

I was expecting one, so didn't say about it but yes we appraise our engagement with FDA is concerned, we won't complain because FDA has been operating it and asking, responding and clarifying and last time when I spoke I realize other than JPMorgan, I said we're in the stage of framing the specifications. Now regarding concomitant views, I can tell you our applications for 20 re-state that’s a broad 40 write up here along with that. It may not be right on the same day, but it might be a difference of few weeks or a couple of months. So both are being executed simultaneously and we have factored you know Copaxone that we've taken into consideration what key launches would be coming in 2017.

Tony Mauro

Right. And like any other product.

Rajiv Malik

We're weighted.

Heather Bresch

Like we have for the last couple of years.

Kris King

About Sumant?

Sumant Kulkarni

Sumant Kulkarni, Bank of America Merrill Lynch. Did I actually see Botox cosmetic on one of the slides. So what's your plan or what specifics do you have on I know genericizing is the right term for that one. Second what's your confidence in the substitute ability of your Lantus biosimilar and third you seem to have a lot of interesting stuff going on at the Company but how do you reconcile that versus the stock and perception around things like corporate governance etc.

Rajiv Malik

So Botox as I said you would expect us working on we have many such key products, so we're working it's an early stage and once get a little more, you know get into the deeper science we'll share with you how we plan to bring it to the market. Lantus absolutely our goal is to work towards you know substitutability, that's why it has taken a little bit more time. We are engaged with their TA to understand what they would be looking for more, for us to convince them to do, but we're going to go ahead with the application and we're going to continue to work on this subject.

Heather Bresch

And Sumant I guess what I would say is, you know as I said at the beginning of the presentation, you know there's no question being headwinds out there from a pharmaceutical industry environment perspective and believe that that has put you know pressure on many stocks across the industry, again I think that's why we were so excited to get here today to show how you know diversified and differentiated we are and that it's not just about the U.S. market it’s an important one but across our global network, what we represent in these systems, and as I said well run company delivers great shareholder return, and what I would say I think as you look at the last decade and importantly what we have forecasted going forward is that, that we continue to stay very focused on delivering shareholder return just as we have been. Thank you.

Kris King

Umer Raffat?

Umer Raffat

Hi, Umer from ISI. thanks for taking my questions. On 2017 guidance is the low end doable without any BD and how much BD is modeled for midpoint? And I have a couple of questions for Rajiv.

Rajiv Malik

Well, when you look at the roadmap, we are currently modeling towards midpoint, I think a little bit of variability in there. You can -- we said that the things are just scaled, so if you kind of size that you would say that BD doesn’t throw us out of the range either way. So it is in there, it is doable, it is something we are focused on and working on. We don’t expect all of it's to go away. But it is -- it alone is not a variable that we will progress outside of range.

Heather Bresch

And I guess one think I just would remind that we have done this every year. So as we have had our financial commitment, there is nothing different about this year from launch has been profitability way that the roll BD plays and all of the, aluminous amount of moving pieces imparts, they go into this guidance. So I just -- I can tell you that not only we are confident in our ranges, but certainly we haven't changing anything about our methodology about how we get there.

Umer Raffat

Got it. Rajiv two for you if I may. So biosimilar, you guys clearly have Herceptin, Neulasta, HUMIRA as well as Lantus, which is not a biosimilar, but four late stage products that meaningful opportunities. The question really is when the earliest end of these could come to market considering a more formal pattern litigation hasn’t really started yet?

Rajiv Malik

I think you again have to take to this picture, if U.S. is the market that’s one question, if a global world is a market, we are already in some markets, but the Europe will be the early developed market launch maybe sometime much sooner than we see -- when we compare with the U.S. And you should expect that. I think what we brought on that table as a partner as a regulatory and the legal IP expertise. And the work on IPT has been doing on certain IPR and some other things around this has brought us to a point -- that will bring us to point where we will very soon be able to talk about, the profitability of what launch exactly launch and share with you. But you should look into -- us launching these products, sooner in Europe and many other countries like we talk about Canada, Australia and all that before coming to USA.

Heather Bresch

And I -- just to remind that in our success or target, we don’t have any U.S. contribution of the biologics or the insulin. We definitely have all the investment as we pointed out caps return there. But as Rajiv said, it's really about monetizing globally, but again that’s a excitement for 2018 -- beyond 2018 as we can bring this products in market here in the U.S.

Umer Raffat

Got it. And Rajiv just my last one. On Advair as I sat through the session today, one thing that I found was you sounded more positive on it during your prepared remarks and less in this last comment you made where you -- so my question is where do you shake out on generic Advair and let me also reiterate there is a question we discussed previously on the FDA guidance asking for more than 12 year old the trial, and your trial in 18 plus. So I just wanted to understand, how FDA, if FDA shouldn’t get back on that topic?

Rajiv Malik

FDA share the feedback day before we started our physical trial. We had a pre-NDA meeting with FDA, we are like you will agree on NDA at clinical protocol and all that be shared with them our program, and we agreed on that. Maybe this time we will be able to put that question aside, because you have been hanging on to that question that is number one. Number two, let's talk about my confidence, we're going to give you the confidence where we stand today and where we what we see. We see nothing. We have as I told you a number of engagements certain information request five preapproval inspections and we continue to be engage with FDA every other day. Now we know this is very highly complex, so that doesn’t mean that we're not confident about it, I'm saying exactly the same word, which I said, I thought in my prepared remarks, we're confident but just to be prudent, we've planned it in a way that it will be ready for the launch that till be preparing, our vision figured out that midyear will be the right time for us to model it in.

Kris King

From Doug?

Doug Tsao

Thanks Doug Tsao, Barclays. Tony, I think in your comment you made a point of that your share within the product categories that you're competing and sort of been contact of the current environment. I'm just curious may be some thoughts in terms of how you expect to improve your market share in your current marketing book of business?

Tony Mauro

Well it thinks it plays very well into the lot of the consolidation we have seen quite frankly. I think there is always an opportunity we pick, whether it's through the normal test, that goes on through the year or by frank when others fail. You know they come -- I wanted to be the first phone call they make, to one of our teams at Mylan sure that we can pick that up. So I think there is always delicate balance we face when trying to capture new share in existing business as well as looking for how we corporate new launches and pulling that share as well.

Rajiv Malik

And also Doug, to say we're constantly keep on looking, because Tony shared about 50% products, they are 50% we market there we're not number one, two or we might be number 5, 6 and we go back to our team to even in the operations to understand what can we do to corner more market share, so that’s a continues phenomena that it's not gets to, that’s we focus on the products where we pick. But we're more focused on the products; we don’t have that product here.

Kris King

I think Erica

Erica Kazlow

Hi, Erica Kazlow showing in for Ronny Gal from Bernstein. Couple of questions more product specific, So I wanted to know where you guys are with Ashrayand when we can expect to see that coming to market based, previous clinical trial that completed. Also on EU-Neulasta, what are your thoughts on why others have gotten the CRL and why is your product differentiated and why do you think that won't get CRL while others have? And then finally on Concerta, so that was approved end of December and we know it came to market but we haven’t really seen any scripts yet from the product. So just trying to understand what's going on there.

Rajiv Malik

Sanjeev, may you will give on answer on EU-Neulasta because that's more technical. Your first was around?

Erica Kazlow

Ashray.

Rajiv Malik

Ashray. So, we're in pretty advance stage for FDA, we have nothing pending from the size prospective, that we have not responded to. And we hope to launch this product to this year. And you're going to talk about Concerta Tony.

Andrea Miller

So EU-Neulasta what we believe, what we can see from the press release that we can see and especially for me out of the recent EMEA reason for rejecting the applications. It looks like there is a lot of going into clinical trials. It looks like it may be related to some PK differentials that may have seen. Again speculating you do have that pretty from the EMEA, which is not something that we have seen a problem with. There is something that we did in our development early on, put our product in which we did a reference versus reference while we were developing it, to pick you the variability so, if you look at tour PK trials, they are little bit bigger trails, we picked up that there is more variability. So, if you didn’t do that you could fall into your trap. We get some of the speculation, but starting to confirm that speculation out of EMEA's last statement when there was true one application.

Rajiv Malik

And maybe just following up on generic Concerta, we launched that product very late in Q4, late last two or three days of the quarter. So, you're seeing just movement of normal inventory from the existing, current manufacturer and then as we move in we'll take that over. So, I think you'll start seeing that conversion grow here in the coming weeks.

Brittany Chen

Hi, I'm Brittany Chen from Barclays, but on the credit research side, I had a couple of questions. Is there any update on the pending settlement with the DOJ regarding the misclassification?

Heather Bresch

No, just that we're continuing to work with the DOJ and hope to finalize it as soon as possible.

Brittany Chen

And then with regards to your statement on commitment to strong investment grade rating, is there any desire for the Company to perhaps move up the ratings curve to maybe a BAA2 area and the reason I ask is because we've a lot of questions from credit investors, modestly concerned that the Company might re-lever up the balance sheet to meet its $0.06 EPS target next year?

Heather Bresch

Well, look I'll start and then I'll let Ken -- I guess what I can say is when you look at our track record of meeting financial commitments while we continue to invest in our business and generate significant free cash flow as you see this year and '16 2.1 billion and our target of 2 billion to 2.4 billion and our commitment to maintain investment grade. So, I can assure you that again we're executing on the short term by continuing to invest and build this business on the long term and so again we're not looking to do anything differently other than what we've been doing to one, hit '17 and our target of $6 dollars in '18.

Ken Parks

Yes, and look the only thing I would add to that is that it's not -- it is across the management team and across the Board to retain that investment grade rating, it's shown in the discipline that we have, I mean for us to put the chart out there, that constantly show us tracking against where our leverage ratio and our covenant limits, we're committed to maintaining that.

Unidentified Analyst

Thank you. Philip [indiscernible] from MUFG Securities. I have actually three questions if I may, the first one, so the Meda acquisition gave you a footprint in the over the counter market, yet when we look at that market globally it is very fragmented, about 10 big players that are active and if you listen to the last earnings call from Sanofi, they said while after their asset swap with Boehringer they would like to see their opportunities for consolidation, can we see Mylan as a consolidator in that space given that you only have 7% of your revenues coming from over the counter? So, that’s my first question. The second one, with President in town, do you expect any meaningful changes with regard to the FDA approval process? And then third maybe a little bit more holistically about healthcare reform you referred to us having the greatest shoppers in the world, which is probably true, but if I look at some forecasts, by 2030 about 70 million people will be 65 years and older in this country, do you really want to burden on this people to be more active in deciding what type of drug treatments they need to get?

Heather Bresch

So, I will attempt to remember all three of those and if -- please chime in. So, from an OTC perspective I absolutely think we'll be a consolidator and I think what's unique about our profile, we're not just in these markets with OTC products, so again this goes back to that balance of Rx, Gx, and OTC and how we are able to leverage that behind the caner and in front of the caner from positions to pharmacist a really building that Mylan name, and bringing some very great assets that we see out there that we can bring in now into this infrastructure that we already have. So like I said we absolutely we have a roadmap and Tony said that we will look to double that business over the next five years.

So we absolutely think that straight assets out there that will continue to consolidate into our infrastructure. As far as the FDA is concerned, I think that with this new administrative you are seeing the beginning of a lot change. Now the talk of a lot of change I think as always the case kind of wait and see how that plays out. And obviously as Secretary Price is now on Board, I think that waiting for the FDA commissioner to get appointment and -- but as you know with GDUFA now in place for the generic drug users fee along with the other DUFAs that there is a real commitment on the industry part and I can tell you some company who will help champion that user fee and the importance of it from the product.

And the competitive landscape and from an inspection perspective, that we continue to see improvement on that front; and so, we certainly have seen a great deal of interaction with FDA when products submitted after a 2013 was with that GDUFA goal date, we are still trying to work our way through the 4,000 backlog. So as I said earlier on my slides generics absolutely drives a savings not cost and the importance of that vibrant and competitive markets important. And so I think whoever the commissioner is I would hope that there is a continued focused on making that more effective more efficient and getting to that backlog and getting more products out there.

As far as the overall healthcare system I guess what I would say is I don’t think that we have a choice for over 65 to get engage. The chart I put up there said over 50% of Americans now look like cash pagan. So if you are being ask to spend $1000, $5000, $8000, $10000 because that’s what deductibles are out of your pocket and have to get engaged. If you are going to get engaged to some side who are forcing that engagement without giving any of the information. I would suggest that over 65, is a pretty savvy group of individuals with the amount of information with from internet from how you can shop from you can grow in your data. Certainly where company that believes we have sophisticated shoppers with direct to consumer advertising we are the only country in the world that allows that. So I would suggest that we have our healthcare systems has evolved to really mandate engagement and what I am saying is that the pharmaceutical pricing system has not kept pace with that. And we need to significantly transform it to let those market dynamics go to work.

Kris King

Tim in back.

Tim Chiang

Tim Chiang, BTIG. Heather with the new administration now starting to get to work could you talk a little bit about how that might help you. I think Donald Trump actually mentioned yesterday in his speech that he wants to see the FDA become more productive. Could you make some comments about that?

Heather Bresch

Sure, as I think he said two things one of the FDA to become more productive and what I would say as again I think we have the largest pipeline of pending and our approvals as anybody else in the industry. So we certainly will benefit from an FDA that continues to work through more efficiently that backlog and not to mention that current pipeline of products that we have going into the FDA. So I think anything on that front I hope its Mylan disproportionately. The other thing you said is that we have artificially high drug prices that need to come down. I think that benefits, so I think when you look at the breadth of our portfolio 22 billion doses sold into the United States last year and then average sales price of $0.25 a dose that we have proven to be volume at a cost effective and providing that affordable access to medicine so I believe on all fronts and truly believe that the transformation needs to happen and then Mylan will clearly be a winner in that.

Tim Chiang

I just had one follow-up. And it's tied to Advair admire, I think you guys you mentioned that you are actually go-to-market this generic product and I'm sort of wondering are you also going to sample the product the physicians?

Rajiv Malik

I don’t know that we've on through have a sampling thought process we certainly will be other shareholder device and the usability of that, but I don’t know that it will be traditional branded type launch more like a generic hybrid.

Andrew Finkelstein

Hi, Andrew Finkelstein from Susquehanna. I was hoping couple of things on the U.S. and then a little bit more broadly. In the United States how do you think that U.S. market you talked about being the only house in the neighborhood, but you do have competitors out there who are facing a more difficult circumstance, so how do you take account of their potential behavior and your outlook for volume and pricing and how you make those trade-offs in your customer relationships? Second, what do you see from FDA in terms of their prioritization of review taking access issues into account or there are products where there is very limited competition in pricing as high and their maybe opportunities giving your dosage forum capabilities and then more broadly on that point as you gave a number of targets to double in the number of these therapeutic areas if we think about that pipeline over the next five years is it more backend waited, is it that was the U.S. or the ex-U.S. components come first.

Heather Bresch

Okay, so maybe I'll start your first, so again that's why I thought as we thought about the presentation and really communicating the fact that why are we differentiate and why do we believe that we have a unique profile and that's why I thought the slide around the durability when you look at the number of years our products have been in the market and more important with the average numbers of competitors.

So again I think there are some players out there that have only had a very small product portfolio with only one or two competitors and so when something happens it becomes as it's very vulnerable. When you look at Mylan's portfolio of over 630 products and the average number of competitors from five, six, seven that would should show that we are already have been in a competitive environment it's not about a handful of products with limited numbers of players.

So I think that we continue to look at our product portfolio, we continue to look for those opportunities and more importantly we're able to have conversations with now our global customers about a global supply. So this is important to them to be able to fill their European needs, the rest of the world needs, then with American needs and so again there is not many companies that are able to have the same conversations from the breath portfolio the capacity that we have and the very deep from a dosage form capability. So I would say that's what again continued to differentiate about our house and the neighborhood. Do you want to add anything?

Tony Mauro

I just might add that I think it's helpful with any customer whether large or small, domestic or global that you're continuing to feed it with new, new growth, new products it plays a role in the volume that you do with that customer really makes a difference from a portfolio approach.

Heather Bresch

And then I don't know Rajiv do you in that the portfolio about whether it's weighted to U.S., ex-U.S. I think again making the point with our opportunity to really monetize a lot of these investments that we've made in other parts of the world and even pre-United States from the biologics and influence but.

Rajiv Malik

It's often it difficult for us to know give that breakup like where it is. But if you see the number of products which are already get their approval that's the next two-three year sort of cycle, but then there are many customers which are getting into submissions that's what we are on that period.

So it's global number one, number two it's across period, it's five year period.

Tony Mauro

And what was your second question we missed that?

Heather Bresch

Yes, and so what I would say is part of the GDUFA 2 negotiation, what we'll see how that plays out with congress in April. But it was very important for us to continue to work towards that prioritization from that all the throughputs are treated equally and there are definitely are some that would be market formation or where access is very limited. So again that has been at the forefront of one of the things that we certainly negotiated for in the second sound. So we truly hope that we'll continue to be able to even more around those lines with FDA from a priority perspective.

We must have done a good job in this presentation.

Kris King

Less I missing the hand, I think that concludes our Q&A Session.

Heather Bresch

Well guys thank you and thank you to everyone who's joined us on the webcast. It's been great to be with you this afternoon. And look forward to seeing all of you soon.

A - Kris King

Thank you all for coming.