Forbes
August 15, 2013
Mylan Ranks #90
Mylan
Market Cap $12.05 B As of May 2013
At a Glance
• Industry: Pharmaceuticals
• Founded: 1961
• Country: United States
• CEO: Heather Bresch
• Website: www.mylan.com
• Employees: 20,000
• Sales: $6.8 B
• Headquarters: Canonsburg, Pennsylvania
Forbes Lists
#90 Innovative Companies
#916 Global 2000
• #1300 in Sales
• #883 in Profit
• #1500 in Assets
• #819 in Market value
Profile
Mylan, Inc. develops and markets generics along with a number of proprietary drugs. The Company's product is for the treatment of migraine headaches, an orphan drug for the on/off fluctuation in people with Parkinson's disease, and a wound care product to treat diabetic foot ulcers.
How We Rank The World's Most Innovative Companies 2013
Most innovation rankings are popularity contests based on past performance or editorial whims. We set out to create something very different with the World’s Most Innovative Companies list, using the wisdom of the crowd. Our method relies on investors’ ability to identify firms they expect to be innovative now and in the future. You can learn more about our research on innovation by visiting learn.innovatorsdna.com. Companies are ranked by their innovation premium: the difference between their market capitalization and a net present value of cash flows from existing businesses (based on a proprietary formula from HOLT/Credit Suisse). The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth.
To be included, firms need seven years of public financial data and $10 billion in market cap. (Facebook FB -1.05%, for example, would be in the top ten if we used only 2012 data.) We require a certain threshold for R&D spending as a percentage of sales, so banks don’t make the list. Nor do energy and mining firms, whose market value is tied more to commodity prices than it is to innovation. Big caveat: Our picks do not correlate with subsequent investor returns. To the extent that today’s share price embeds high-growth expectations, one might even anticipate returns to investors to be low, as these expectations may be difficult to meet.
We use something called the Innovation Premium to compile our list. It is calculated first by projecting a company’s income (cash flows, in this case) from existing businesses, plus anticipated growth from those businesses, and look at the net present value (NPV) of those cash flows. We compare the NPV of cash flows from existing businesses with a current market capitalization: Companies with a current market cap above the NPV of cash flows have an innovation premium built into their stock. You can read a more detailed explanation of our work around innovative companies and leaders in our book The Innovators DNA (Harvard Business Press, 2011), written with Harvard Business School professor Clayton Christensen.