10-K 1 0001.txt MYLAN LABORATORIES INC. 1999 10-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K Annual Report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934For the fiscal year ended March 31, 2000 Commission File No. 1-9114 MYLAN LABORATORIES INC. (Exact name of registrant as specified in its charter) Pennsylvania 25-1211621 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 1030 Century Building 130 Seventh Street Pittsburgh, Pennsylvania 15222 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 412-232-0100 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class on Which Registered ------------------- --------------------- Common Stock, par value $.50 per share New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes...X.... No....... Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.[ ] The aggregate market value of voting stock held by non-affiliates of the registrant, computed by reference to the closing price of such stock as of June 20, 2000: $2,137,112,992 The number of shares of Common Stock of the registrant outstanding as of June 20, 2000: 126,721,906 Documents incorporated by reference into this Report are: Annual Report to Shareholders for year ended March 31, 2000... Part I, Item 1 Part II, Items 5-8 Proxy Statement for 2000 Annual Meeting of Shareholders... Part III, Items 10-13 PART I Item 1. Business Mylan Laboratories Inc., a Pennsylvania corporation incorporated in 1970, and its subsidiaries (herein referred to collectively as "the Company") are engaged in developing, licensing, manufacturing, marketing and distributing generic and branded pharmaceutical products. References herein to fiscal 2000, 1999 and 1998 shall mean the fiscal years ended March 31, 2000, 1999 and 1998, respectively. The Company conducts business through its generic and branded pharmaceutical operating segments. For fiscal 2000, the generic segment represented approximately 85% of revenues and the branded segment represented approximately 15% of revenues. The financial information for operating segments required by Item 1 is hereby incorporated by reference to Note R of the Notes to Consolidated Financial Statements in the accompanying Annual Report to Shareholders for the year ended March 31, 2000. Generic Segment Through its subsidiaries, Mylan Pharmaceuticals Inc. and UDL Laboratories Inc., acquired in fiscal 1996, the Company is recognized as a leader in the generic pharmaceutical industry. Generic drugs are bioequivalent to their brand name counterparts and are generally sold at prices significantly less than branded products. Accordingly, generics provide a safe, effective and cost efficient alternative to users of these branded products. The Company attained its leadership position in the generic industry through its ability to obtain Abbreviated New Drug Application ("ANDA") approvals, uncompromising quality control and devotion to customer service. To build on this position the Company has expanded beyond its traditional solid oral dose products and now offers unit dose, suspensions, liquids, transdermal and extended release products. The investment in research and development and facilities to manufacture products in a variety of delivery systems is one of the many reasons the Company is a leader in the generic industry. The Company has entered into strategic alliances with several pharmaceutical companies through distribution and licensing agreements which provide the Company with additional products to broaden the Company's product line. In addition, the Company has entered into product development and licensing agreements, under which the Company has obtained rights to manufacture and distribute other pharmaceutical products in exchange for funding of drug development activities. Due to the non-exclusive nature of generic products, the generic industry is comprised of numerous competitors including manufacturers that market their products under their own names, distributors that market products manufactured by others, and brand name companies that market their products under both the brand name and as a generic substitute. The non-exclusive nature thus allows for significant price competition within the generic pharmaceutical industry. Branded Segment Pharmaceutical products initially sold on an exclusive basis are known in the industry as proprietary or branded products. These products generally are patent protected when introduced in the marketplace. The Company operates its branded segment principally through its Bertek Pharmaceutical Inc. ("Bertek") subsidiary. Bertek's three therapeutic areas of concentration include cardiology, neurology and dermatology. The cardiology focus is built upon Maxzide(R), Digitek(R) and Nitrek(R). The Maxzide(R) products, originally developed and manufactured by the Company, were reacquired from American Home Products Corp. in fiscal 1997. The Company continues to expand its branded business through internally developed products as well as through product acquisitions. To expand its presence in dermatology, on October 2, 1998, the Company acquired 100% of the outstanding stock of Penederm Inc. Bertek, through this acquisition, now develops patented topical prescription products at its research and development facilities in Foster City, California. The current product portfolio primarily consists of Avita(R), Mentax(R), and Acticin(R). New Product Approvals The Company is required to secure and maintain the U.S. Food and Drug Administration's ("FDA") approval for the products it intends to manufacture and market. The FDA grants such approval by approving Company submitted ANDAs for generic drug products and New Drug Applications ("NDAs") for branded drug products. During fiscal 2000, the Company received 20 final approvals: Verapamil HCl ER Capsules, Estradiol Tablets, Prednisolone Syrup, Clozapine Tablets, Diclofenac Potassium Tablets, Estropipate Tablets, Dicyclomine HCl Tablets, Dicyclomine HCl Capsules, Carbidopa and Levodopa ER Tablets, Ticlopidine HCl Tablets, Nitroglycerin Delivery System (0.1mg/hr, 0.2mg/hr, 0.4mg/hr, 0.6mg/hr), Nifedipine ER Tablets, Ketoconazole Tablets, Hydrochlorothiazide Capsules, Terazosin HCl Anhydrous Capsules, and Estradiol Transdermal System (0.05mg/day and 0.1mg/day). Additionally, in fiscal 2000, the Company received two supplements for additional strengths: Atenolol 25mg Tablets and Glyburide 6mg Tablets. Currently, the Company has before the FDA 25 ANDAs pending final approval and seven Investigational New Drug ("IND") applications filed with the FDA for new innovator compounds. An IND is the result of a successful preclinical development program and becomes part of the final NDA. Products The information on the Company's product line set forth on pages8-12 of the accompanying Annual Report to Shareholders for the year ended March 31, 2000, is incorporated herein by reference. For fiscal 2000, sales of the Company's antianxiety product group accounted for approximately 16% of net sales. During fiscal 2000, 1999 and 1998, the Company expensed $49,121,000, $61,843,000, and $46,278,000, for research and development. The Company's research and development efforts are conducted primarily to qualify the Company to manufacture ethical pharmaceuticals under FDA standards and approval. Typically research expenses related to the development of innovative compounds and the filing of NDAs are significantly higher than those associated with ANDAs. As the Company continues to develop these products, research expenses related to their development may increase. Customers and Marketing The Company sells its products to proprietary and ethical pharmaceutical wholesalers and distributors, drug store chains, drug manufacturers and public and governmental agencies. Four of the Company's customers accounted for approximately 15%, 15%, 11%, and 10% of net sales in fiscal 2000. Three customers accounted for approximately 15%, 14%, and 11% of net sales in fiscal 1999 and 13%, 12%, and 11% of net sales in fiscal 1998. Generic pharmaceutical products are marketed directly to traditional drug store chains, mass merchandising chains, and food and drug chains. In addition, product is distributed through wholesalers and distributors servicing non-warehousing chains, independent pharmacies, and institutional customers on a contractual basis. Due to the buying patterns of certain customers, in conjunction with incentive programs, a disproportionate amount of sales may be recognized in the latter part of a period. Generic products involve limited public promotion. Approximately 70 employees are engaged in selling and servicing generic customers. Branded pharmaceutical products are marketed directly to health care professionals. Approximately 260 employees are engaged in marketing, selling and servicing branded customers. Competition With respect to each of the generic products it sells, the Company believes it is usually subject to active competition from numerous companies. The four primary means of competition are service, product quality, FDA approval and price. The competition experienced by the Company varies among the markets and classes of customers. The Company has experienced additional competition from brand-name competitors that have entered the generic pharmaceutical industry by creating generic subsidiaries, purchasing generic companies or licensing their products prior to or as their patents expire. In addition to the increase in the number of competitors, the consolidation of the Company's customers through mergers and acquisitions, along with the emergence of large buying groups representing independent pharmacies and health maintenance organizations, have contributed to severe price deterioration for many of the Company's generic products. While the Company has increased unit volume of its generic products through specialized marketing programs, this has not fully offset the price declines the Company has experienced. In response to the price declines for generic products, the Company raised prices on 29 products beginning in fiscal 1998 and continuing through fiscal 1999. While these price increases had a favorable impact on net earnings, such impact, if any in the future, will be affected by many factors including customer acceptance and the response by both existing and potential competitors as well as by both existing and potential suppliers. The Company intends to evaluate its pricing practices and make adjustments to the price of its products when appropriate. The Company continues to work closely with its customers and suppliers to ensure that its full line of generic products is available as a cost effective alternative to the innovator products (See Part II, Item 7 of this report for a discussion relating to the impact of the Company's pricing policies). In the branded segment, the Company faces competition from other branded pharmaceutical companies that offer products which, while having different properties, are intended to provide similar benefits to the consumers. These competitors tend to have more products, a longer history in the industry, additional marketing and sales representatives and significantly more financial resources. Each of these factors or others could prevent the Company from achieving profitable results in the branded industry. Product Liability Product liability suits by consumers represent a continuing risk to firms in the pharmaceutical industry. The Company strives to minimize such risks by adherence to stringent quality control procedures. Although the Company carries insurance, it believes that no reasonable amount of insurance can fully protect it against all such risks because of the potential liability inherent in the business of producing pharmaceuticals for human consumption. Raw Materials The active chemical ingredients and other materials and supplies used in the Company's pharmaceutical manufacturing operations are generally available and purchased from many different foreign and domestic suppliers. However, in some cases, the raw materials needed by the Company to manufacture pharmaceutical products are available from a single FDA-approved supplier. Even when more than one supplier exists, the Company may elect to list, and in some cases has only listed, one supplier in its applications with the FDA. New suppliers of the active ingredients in drugs must be approved by the FDA. Accordingly, in the event of an interruption, any change in a supplier not previously approved may take several months. In addition, recent and pending regulatory actions may make it more difficult for the Company and other generic pharmaceutical manufacturers to obtain commitments from foreign suppliers for raw materials prior to the expiration of patents on branded products. The unavailability of such raw materials could also impede the Company in its efforts to develop and obtain FDA approval to manufacture and market new generic pharmaceutical products. Regulation The Company's operations are subject to regulation under the Federal Food, Drug and Cosmetic Act, pursuant to which government standards as to "good manufacturing practice", product content, purity, labeling, effectiveness and record keeping (among other things) must be observed. In this regard, the FDA has extensive regulatory powers over the activities of pharmaceutical manufacturers including the power to seize and prohibit the sale of noncomplying products and to halt operations of noncomplying manufacturers. In addition to the extensive regulation the Company faces under the Federal Food, Drug and Cosmetic Act, other regulations have also affected the generic approval process. In June 1995, the Uruguay Round Agreements Act ("URAA") took effect which extended patent terms pursuant to the General Agreements on Tariffs and Trade. The extension of patent terms has delayed the introduction of generic products by the Company. While URAA has already extended patent terms, the brand companies have further delayed the approval of new generic products by filing patent infringement suits under the Hatch-Waxman Act. The Company upon filing an ANDA with the FDA must make one of five certifications with respect to innovator patents. If the company certifies that its generic product is not infringing a patent or that a patent is invalid, the patentee can file suit. Brand companies use this certification process to prevent generic companies from introducing competing generic products by bringing suit for alleged patent infringement. Once a suit is filed, the FDA is prohibited from approving the ANDA for thirty months or until the suit is litigated or settled. Along with delaying the approval of generic products, the cost of bringing a new generic product to market has risen substantially as the number of these suits and the cost of defending them continues to increase. All such suits settled to date have been on terms favorable to the Company. However, until the laws are changed, the Company expects this type of suit will continue since it has proven a very effective way for brand companies to delay generic competition. The Company is subject to inspection and regulation under other federal and state legislation relating to drugs, narcotics and alcohol. Many of its suppliers and customers, as well as the drug industry in general, are subject to the same or similar governmental regulations. The Company also is subject to various federal, state, and local environmental protection laws and regulations. Compliance with current environmental protection laws and regulations has not had a material effect on the earnings, cash flow or competitive position of the Company. It is impossible for the Company to predict the extent to which its operations will be affected under the regulations discussed above or any new regulations which may be adopted by regulatory agencies. Employees The Company employs approximately 2,300 persons, approximately 1,200 of whom serve in clerical, sales and management capacities. The remaining are engaged in production and maintenance activities. The production and maintenance employees at the Company's manufacturing facilities in Morgantown, West Virginia, are represented by the Oil, Chemical and Atomic Workers International Union (AFL-CIO) and its Local Union 8-957 under a contract which expires April 5, 2002. Backlog At March 31, 2000, the uncompleted portion of the Company's backlog of orders was approximately $28,226,000 as compared to approximately $7,388,000 at March 31, 1999, and $19,899,000 at March 31, 1998. Because of the relatively short lead time required in filling orders for its products, the Company does not believe these backlog amounts bear a significant relationship to sales or income for any full twelve-month period. Item 2. Properties The Company operates from various facilities in the United States and Puerto Rico which have an aggregate of approximately 1,305,000 square feet. Mylan Pharmaceuticals Inc. owns production, warehouse, laboratory and office facilities in three buildings in Morgantown, West Virginia containing 484,000 square feet. Mylan Pharmaceuticals operates two distribution centers: a 166,000 square foot center in Greensboro, North Carolina which it owns and a 38,000 square foot center in Reno, Nevada which it operates under a lease expiring in 2002. A new sales and administration facility containing approximately 65,000 square feet is currently under construction in Morgantown, West Virginia. Mylan Inc. owns a production and office facility in Caguas, Puerto Rico containing 115,000 square feet and a production facility in Cidra, Puerto Rico containing 32,000 square feet. Bertek Pharmaceuticals, Inc. owns production, warehouse and office facilities in two buildings in Sugar Land, Texas containing 70,000 square feet and research and development facilities in two buildings in Foster City, California containing 27,000 square feet under leases expiring in 2003. Mylan Technologies Inc. owns production, warehouse, laboratory, and office facilities in three buildings in Swanton and St. Albans, Vermont containing 118,000 square feet. Mylan Technologies Inc. also operates a coating and extrusion facility in St. Albans containing 71,000 square feet under a lease expiring in 2015. UDL Laboratories Inc. owns production, laboratory, warehouse, and office facilities in three buildings in Rockford, Illinois and Largo, Florida containing 136,000 square feet. UDL also leases a warehouse facility in Rockford containing 41,000 square feet under a lease expiring in 2005. The Company's production equipment includes that equipment necessary to produce and package tablet, capsule, aerosol, liquid, transdermal and powder dosage forms. The Company maintains seven analytical testing laboratories for quality control. The Company's production facilities are operated primarily on a two-shift basis. Properties and equipment are well maintained and adequate for present operations. The Company's corporate offices, approximately 7,000 square feet, are located at 1030 Century Building, 130 Seventh Street, Pittsburgh, Pennsylvania, and are occupied under a lease expiring in 2003. Item 3. Legal Proceedings In March 1999, a subsidiary of the Company entered into binding arbitration related to a dispute with KaiGai Pharmaceutical, Co., Ltd. ("KaiGai"). The dispute arose out of a license and supply agreement for nitroglycerin transdermal patches that both companies claim was breached by the other party. KaiGai sought damages in excess of $20,000,000. In November 1999, the arbitration panel denied KaiGai's request for damages. KaiGai filed an appeal and the Company has filed a motion to dismiss the appeal due to the appeal not being filed within the time period permitted. In June 1998, the Company filed suit in Los Angeles Superior Court against American Bioscience, Inc. ("ABI"), American Pharmaceutical Partners, Inc. ("APP") and certain of their directors and officers. The Company's suit seeks various legal and equitable remedies. The Los Angeles Superior Court issued a preliminary injunction order which, among other things, prohibits the defendants from transferring or disposing of funds, assets, technology or property without the Company's consent or commingling assets, property, technology or personnel with those of another company. In June 1999, the defendants filed an answer to and cross-complaint against the Company. The cross-complaint alleges violations of California state laws, interference with contractual relations and prospective economic advantage, fraud, slander, libel and other allegations. The cross-complaint seeks unspecified compensatory and punitive damages. The Company believes the cross-complaint is without merit and intends to vigorously defend its position. In May 1998, Genpharm Inc. filed in the general division of Ontario Court, Canada, a statement of claim against Novopharm Limited and Granutec, Inc. ("Novopharm"). The claim was filed to resolve contract interpretation issues and collect additional funds due relating to an agreement between the parties for the sale of ranitidine. In July 1998, Novopharm filed a counterclaim against Genpharm and the Company seeking damages of up to $60,000,000. The Company was named in the counterclaim due to its agreement with Genpharm in which it shared in profits derived from the product ranitidine. The Company believes the counterclaim is without merit and intends to vigorously to defend its position. On December 22, 1998, the Federal Trade Commission ("FTC") filed suit in U.S. District Court for the District of Columbia (the "Court") against the Company. The FTC's complaint alleges the Company engaged in restraint of trade, monopolization, attempted monopolization and conspiracy to monopolize, arising out of certain agreements involving the supply of raw materials used to manufacture two drugs. The FTC also sued in the same case the foreign supplier of the raw materials, the supplier's parent company and its United States distributor. Under the terms of the agreements related to these raw materials, the Company has agreed to indemnify these parties. The Company is a party to other suits involving the Attorneys General from 33 states and more than 25 putative class actions that allege the same conduct alleged in the FTC suit as well as alleged violations of state consumer protection laws. A qui tam action was commenced by a private party in the U.S. District Court for the District of South Carolina purportedly on behalf of the United States alleging violations of the False Claims Act and other statutes. The relief sought by the FTC includes an injunction barring the Company from engaging in the challenged conduct, recision of certain agreements and disgorgement in excess of $120,000,000. The states and private parties seek similar relief, treble damages and attorneys' fees. The Company's motions to dismiss several of the private actions were granted. A class action suit was filed alleging violations of federal securities laws by the Company and certain directors and officers of the Company. Without specifying a dollar amount, the suit sought compensatory damages. The Company's motion to dismiss the federal securities case was granted on December 22, 1999. An appeal is pending. The Company had filed motions to dismiss the FTC complaint and significant portions of the State Attorneys General complaint. In July 1999, the Court denied the Company's motion to dismiss the FTC complaint. The Company filed a motion requesting the Court to certify its ruling with respect to the jurisdictional issue for expedited appeal to the U.S. Court of Appeals for the District of Columbia. This motion was denied. The Court granted in part and denied in part the Company's motion to dismiss portions of the State Attorneys General complaint. In so doing, the Court limited certain theories of recovery asserted by the states. Some States filed a motion with the Court requesting that it reconsider certain claims that were dismissed, and, in December 1999, the Court reinstated certain claims. The Company believes that it has meritorious defenses to the claims in all FTC and related suits and intends to vigorously defend them. Although the Company believes it has meritorious defenses to the claims, an adverse result in these suits could have a material adverse effect on the Company's financial position and results of its operations. The Company is involved in various other legal proceedings that are considered normal to its business. While it is not feasible to predict the ultimate outcome of such proceedings, it is the opinion of management that the outcome of these suits will not have a material adverse effect on the Company's operations, financial position, or liquidity. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. EXECUTIVE OFFICERS OF THE REGISTRANT The names, ages and positions of the Company's executive officers are as follows: Milan Puskar 65 Chairman and Chief Executive Officer Richard F. Moldin 52 President and Chief Operating Officer Dana G. Barnett 59 Executive Vice President Louis J. DeBone 54 Senior Vice President Roger L. Foster 53 Vice President and General Counsel Roderick P. Jackson 60 Senior Vice President Donald C. Schilling 50 Vice President-Finance and Chief Financial Officer Patricia A. Sunseri 60 Vice President-Investor and Public Relations Robert W. Smiley 78 Secretary Mr. Puskar was employed by the Company from 1961 to 1972 and served in various positions, including Secretary-Treasurer, Executive Vice President and a member of the Board of Directors. From 1972 to 1975, Mr. Puskar served as Vice President and General Manager of the Cincinnati division of ICN Pharmaceuticals Inc. In addition, he has served as a partner of several pharmaceutical firms in foreign countries. Currently, Mr. Puskar is a director of West Virginia University Foundation, Morgantown, West Virginia, and Duquesne University, Pittsburgh, Pennsylvania. Mr. Puskar served as President of the Company from 1976 to March 2000 and as Vice Chairman of the Board from 1980. He was elected Chairman of the Board and Chief Executive Officer in November 1993. Mr. Moldin was employed by the Company in April 2000. Prior to assuming his position as President and Chief Operating Officer of the Company, he was President and Chief Executive Officer of Faulding Inc. from 1995 to 2000. Mr. Moldin served in various executive and management positions for Wellcome plc. in England, Australia and the United States from 1979 to 1995. Mr. Barnett was employed by the Company in 1966. His responsibilities have covered production, quality control and product development. Mr. Barnett became Vice President in 1974, Senior Vice President in 1978 and Executive Vice President in 1987. He was elected President and Chief Executive Officer of Somerset Pharmaceuticals, Inc. in June 1991, and in August 1995, he was elevated to Chairman and Chief Executive Officer. Mr. DeBone has been employed by the Company since September 1987. Prior to assuming his present position in May 1999, he served as Vice President-Operations and Vice President-Quality Control. He was previously employed with the Company from March 1976 until June 1986 as Director of Manufacturing. Mr. Foster has been employed by the Company since May 1984. Prior to assuming his present position in June 1995 as Vice President and General Counsel he served as Director of Legal Services and as Director of Governmental Affairs. Mr. Jackson has been employed by the Company since March 1986. Prior to assuming his present position in October 1992 as Senior Vice President, he served as Vice President-Marketing and Sales. Mr. Schilling has been employed by the Company since October 1997. Prior to assuming his present position as Vice President-Finance, he was Vice President of Finance & Administration for Plastics Manufacturing Inc. in Harrisburg, NC from 1991 to 1997. Mrs. Sunseri has served as a Director of the Company since April 1997, as Vice President-Investor and Public Relations of the Company since 1989 and as Director of Investor Relations of the Company from 1984 to 1989. Mr. Smiley has been the Secretary of the Company since 1976. He previously served on the Company's Board of Directors. In October 1992, he joined the law firm of Doepken Keevican & Weiss Professional, which provided legal services to the Company in fiscal 2000. Previously, he was a partner of Smiley, McGinty & Steger for more than five years. No family relationships exist between any of the above executive officers. Officers of the Company serve at the pleasure of the Board of Directors. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters The information required by Item 5 is hereby incorporated by reference to pp. 14 and 41 of the accompanying Annual Report to Shareholders for the year ended March 31, 2000. Item 6. Selected Financial Data The information required by Item 6 is hereby incorporated by reference to p. 14 of the accompanying Annual Report to Shareholders for the year ended March 31, 2000. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The information required by Item 7 is hereby incorporated by reference to pp. 15-21 of the accompanying Annual Report to Shareholders for the year ended March 31, 2000. Item 7A. Quantitative and Qualitative Disclosures About Market Risk The information required by Item 7A is hereby incorporated by reference to p. 20 of the accompanying Annual Report to Shareholders for the year ended March 31, 2000. Item 8. Financial Statements and Supplementary Data The information required by Item 8 is hereby incorporated by reference to pp. 22-41 of the accompanying Annual Report to Shareholders for the year ended March 31, 2000. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. PART III Item 10. Directors and Executive Officers of the Registrant The information as to directors required by Item 10 is hereby incorporated by reference to pp. 2 and 3 of the Company's 2000 Proxy Statement. Information concerning executive officers is provided in PART I of this report under the caption "Executive Officers of the Registrant". Item 11. Executive Compensation The information required by Item 11 is hereby incorporated by reference to pp. 8-9 of the Company's 2000 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management The information required by Item 12 is hereby incorporated by reference to pp. 10 and 11 of the Company's 2000 Proxy Statement. Item 13. Certain Relationships and Related Transactions The information required by Item 13 is hereby incorporated by reference to p. 3 of the Company's 2000 Proxy Statement and Part I of this report. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) 1. List of Financial Statements Annual Report Page Number INCLUDED IN ANNUAL REPORT TO SHAREHOLDERS: Consolidated Balance Sheets.............................. 22-23 Consolidated Statements of Earnings...................... 24 Consolidated Statements of Shareholders' Equity ......... 25 Consolidated Statements of Cash Flows.................... 26-27 Notes to Consolidated Financial Statements............... 28-39 Independent Auditors' Report............................. 40 2. Financial Statement Schedules The information required by this Item is incorporated herein by reference to Exhibit 99. All other schedules have been omitted because they are not required or the information can be derived from the Consolidated Financial Statements included in the accompanying Annual Report to Shareholders for the year ended March 31, 2000. 3. Exhibits (3)(a) Amended and Restated Articles of Incorporation of the registrant, filed as Exhibit 4.2 to the Form S-8 on December 23, 1997 (registration number 333-43081) and incorporated herein by reference. (b) By-laws of the registrant, as amended to date, filed as Exhibit 4.3 to the Form S-8 on December 23, 1997 (registration number 333-43081) and incorporated herein by reference. (4)(a) Rights Agreement, as amended to date, between the Company and American Stock Transfer & Trust Co., filed as Exhibit 4.1 to Form 8-K dated August 30, 1996 and incorporated herein by reference. Amendment is incorporated herein by reference to Exhibit 1 to Form 8-A/A dated March 31, 2000. (10)(a) Mylan Laboratories Inc. 1986 Incentive Stock Option Plan, as amended to date, filed as Exhibit 10(b) to Form 10-K for fiscal year ended March 31, 1993 and incorporated herein by reference. (b) "Salary Continuation Plan" with Milan Puskar, Dana G. Barnett and C.B. Todd each dated January 27, 1995 and filed as Exhibit 10(b) to Form 10-K for fiscal year ended March 31, 1995 and incorporated herein by reference. (c) "Salary Continuation Plan" with Louis J. DeBone dated March 14, 1995 filed as Exhibit 10(c) to Form 10-K for fiscal year ended March 31, 1995 and incorporated herein by reference. (d) Employment contract with Milan Puskar dated April 28, 1983, as amended to date, filed as Exhibit 10(e) to Form 10-K for fiscal year ended March 31, 1993 and incorporated herein by reference. (e) Split Dollar Life Insurance Arrangement with McKnight Irrevocable Trust filed as Exhibit 10(g) to Form 10-K for fiscal year ended March 31, 1994 and incorporated herein by reference. (f) "Service Benefit Agreement" with Laurence S. DeLynn, John C. Gaisford, M.D., and Robert W. Smiley, Esq. each dated January 27, 1995 and filed as Exhibit 10(g) to Form 10-K for fiscal year ended March 31, 1995 and incorporated herein by reference. (g) Split Dollar Life Insurance Arrangement with Milan Puskar Irrevocable Trust filed as Exhibit 10(h) to Form 10-K for the fiscal year ended March 31, 1996 and incorporated herein by reference. (h) Split Dollar Life Insurance Arrangement with the Todd Family Irrevocable Trust filed as Exhibit 10(i) to Form 10-K for the fiscal year ended March 31, 1997 and incorporated herein by reference. (i) Split Dollar Life Insurance Arrangement with the Dana G. Barnett Irrevocable Family Trust filed as Exhibit 10(j) to Form 10-K for the fiscal year ended March 31, 1997 and incorporated herein by reference. (j) "Salary Continuation Plan" with Patricia Sunseri dated March 14, 1995 filed as Exhibit 10(k) to Form 10-K for the fiscal year ended March 31, 1997 and incorporated herein by reference. (k) Mylan Laboratories Inc. 1997 Incentive Stock Option Plan, as amended to date, filed herewith. (l) Mylan Laboratories Inc. 1992 Nonemployee Director Stock Option Plan, as amended to date, filed as Exhibit 10(l) to Form 10-K for the fiscal year ended March 31, 1998 and incorporated herein by reference. (m) "Salary Continuation Plan" with Roderick P. Jackson dated March 14, 1995, as amended to date, filed as Exhibit 10(m) to Form 10-K for fiscal year ended March 31, 1999 and incorporated herein by reference. (13) Fiscal 2000 Annual Report to Shareholders which, except for those portions incorporated by reference, is furnished solely for the information of the Securities and Exchange Commission and is not deemed to be "filed". (21) Subsidiaries of the registrant, filed herewith. (23) Consents of Independent Auditors, filed herewith. (27) Financial Data Schedule, filed herewith. (99) Consolidated financial statements of Somerset Pharmaceuticals, Inc. for years ended December 31, 1999, 1998, and 1997, filed herewith. (b) Reports on Form 8-K The Company was not required to file a report on Form 8-K during the quarter ended March 31, 2000. SIGNATURES Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: June 22, 2000 by /S/ MILAN PUSKAR Milan Puskar Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /S/ MILAN PUSKAR June 22, 2000 /S/ DANA G. BARNETT June 22, 2000 Milan Puskar Dana G. Barnett Chairman and Chief Executive Officer Executive Vice President and Director (Principal executive officer) /S/ LAURENCE S. DELYNN June 22, 2000 /S/ DOUGLAS J. LEECH June 22, 2000 Laurence S. DeLynn Douglas J. Leech Director Director /S/PATRICIA A. SUNSERI June 22, 2000 /S/JOHN C. GAISFORD,M.D.June 22, 2000 Patricia A. Sunseri John C. Gaisford,M.D. Vice President and Director Director /S/ C.B. TODD June 22, 2000 /S/ DONALD C. SCHILLING June 22, 2000 C.B. Todd Donald C. Schilling Director Vice President-Finance and Chief Financial Officer (Principal financial officer and principal accounting officer)