Par Pharmaceutical Companies, Inc.

Par Pharmaceutical Companies, Inc. (PRX), the generic drug manufacturer, saw revenue grow 32% as sales popped for Metroprolol, the generic version of angina drug Toprol. The company's surprise of 81.48% had analysts scrambling to raise estimates. PRX is trading with a PEG ratio of just 0.79.

Company Description

Par Pharmaceutical manufactures generic drugs and branded pharmaceuticals for the specialty markets. The company ranks among the top ten in generic drug sales in the United States.

The branded division, Strativa Pharmaceuticals, was launched in 2005 and has licensed 4 proprietary drugs that are in development.

Revenue Surged 32% in the First Quarter

On May 6, Par reported first quarter results which easily surprised on Wall Street estimates by 81.48%. Adjusted earnings per share were 49 cents compared to 17 cents in the year ago period. Analysts were expecting just 27 cents.

Revenue grew 32% to $204 million from $154.9 million in the year ago period. Growth was fueled by a 127% increase in sales of Metroprolol, a generic version of Toprol XL, which treats angina.

Par became the authorized generic distributor for Toprol, which was developed by AstraZeneca, in the first quarter. Gains in three other generic drugs offset declines in fluticasone and Megace ES.

Consensus Estimates Jump

Given the far better-than-expected second quarter results, covering analysts have been raising estimates for the second quarter and the full-year.

Second-quarter consensus estimates rose 65% to 43 cents from 26 cents in the last 30 days with 7 out of 8 covering analysts raising during that time.

Full-year consensus estimates jumped 44% to $1.31 from 91 cents in the last month, also with 7 out of 8 analysts raising estimates.

Value Fundamentals

Par Pharmaceuticals is a Zacks #1 Rank (strong buy) stock. It has attractive value characteristics. Its forward P/E is 11.9 while its price-to-book is 1.09. Analysts expect 5-year earnings growth of 13%.

Read the full analyst report on PRX