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Horizon Pharma plc reported better-than-expected results for the third quarter of 2017. The company also raised its annual sales guidance. Following the news, the company’s shares went up 1.2%. However, Horizon Pharma’s stock has declined 11.3% year-to-date as against the industry’s gain of 5.4%.
The company reported third-quarter earnings of 26 cents per share which beat the Zacks Consensus Estimate of 22 cents but were down from 70 cents in the year-ago quarter.
Sales in the third quarter were down 1% year over year to $271.6 million but beat the Zacks Consensus Estimate of $254.1 million.
The Orphan unit recorded revenues of $117.4 million, up 64% from the year-ago period. The strong performance was backed by solid net sales of Ravicti, which generated sales of $50.9 million in the quarter, up 21% year over year driven by continued conversion from older-generation nitrogen-scavenger therapies, as well as the addition of treatment-naïve patients due to the recent label expansion. We remind investors that the FDA approved a supplemental New Drug Application for Ravicti to expand the age range for chronic management of urea cycle disorders in patients to two months and older from two years and older.
Additionally, Procysbi contributed to the performance with its net sales of $33.5 million. Actimmune sales in the reported quarter were $29.2 million, up 17% year over year driven by the continued efforts to establish the role of Actimmune in a broader range of chronic granulomatous disease patients.
The Rheumatology unit generated sales of $58.1 million, up 44% year over year. Also, Krystexxa sales in the quarter were strong and came in at $42.8 million, up 67% year over year, driven by continued strong year-over-year vial demand.
Primary Care garnered revenues of $96.1 million, down 41% year over year. The decline in net sales was due to the implementation of a new contracting model, in order to secure broader inclusion of the company’s primary care medicines on formularies. Sales also declined sequentially as a result of lower average net realized price.
Net sales of Pennsaid2%, Duexix and Vimovo were $48.3 million, $31.6 million and $15.1 million, respectively, in the reported quarter.
2017 Guidance
The company raised its outlook for 2017 and now expects sales in the range of $1.030-$1.055 billion, compared with the earlier estimate of $1.010-$1.045 billion.
The company continues to invest in the expansion of Krystexxa into nephrology indication and expects sales growth of more than 50% in 2018. The guidance includes assumption of lower net average net realized price beginning in the second half primarily resulting from the U.S. Government's Health Resource and Services Administration's Final Rule on 340B drug ceiling price implementation scheduled for July 2018.
Horizon Pharma is significantly increasing investments in one its key growth drivers, Krystexxa and expects net sales for Krystexxa of more than $400 million in 2017 driven by higher demand. The company expects continued double-digi t net sales growth for Ravicti in 2017, with room for additional uptake due to the recent label expansion. Sales of Procysbi will decline to the divestiture of European rights. Sales of Actimmune are projected to grow around 5%.
Other Updates
The company announced that the first patient was enroled and infused in phase III confirmatory clinical trial evaluating teprotumumab for the treatment of thyroid eye disease, or TED. We remind investors that the company acquired River Vision earlier and added its biologic candidate teprotumumab to its pipeline.
In June 2017, Horizon Pharma sold the marketing rights for Procysbi and Quinsair in the Europe, the Middle East and Africa regions to Chiesi Farmaceutici S.p.A. as the company focuses on higher-return businesses.
Meanwhile, the company is working on expanding Actimmune’s label. An investigator-initiated study at the Moffitt Cancer Center is underway and enrolling patients. The study is evaluating Actimmune in combination with Roche Holdings’ (RHHBY - Free Report) Herceptin, Perjeta, and Taxol and aims to determine the optimal dosing and treatment combination in certain advanced breast cancer patients. The company has collaborated with the Fox Chase Cancer Center to evaluate Actimmune in combination with a Bristol-Myers Squibb Company’s (BMY - Free Report) Opdivo in a phase I dosing study for the treatment of kidney and bladder cancer. The study continues to enroll its fourth cohort of patients and expects to have dose level results by the end of the year. The National Cancer Institute has plans to evaluate Actimmune in combination with Merck & Co’s (MRK - Free Report) Keytruda to treat cutaneous t-cell lymphoma patients. This phase II study remains on track to begin. The company remains on track to submit a supplemental New Drug Application in the first quarter of 2018 to expand the age range for chronic management of urea cycle disorders (UCDs) to birth and older.
Our Take
Horizon Pharma’s third-quarter results were impressive with the company beating on both the top and bottom-line estimates. Moreover, the increase in sales guidance for 2017 was encouraging as well. We expect Krystexxa, Ravicti and Actimmune to drive further growth.
The acquisition of teprotumumab has further diversified the company’s portfolio.
Zacks Rank
Horizon Pharma currently has a Zacks Rank #4 (Sell).
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Horizon Pharma (HZNP) Tops Q3 Earnings & Sales, Ups View
Horizon Pharma plc reported better-than-expected results for the third quarter of 2017. The company also raised its annual sales guidance. Following the news, the company’s shares went up 1.2%. However, Horizon Pharma’s stock has declined 11.3% year-to-date as against the industry’s gain of 5.4%.
The company reported third-quarter earnings of 26 cents per share which beat the Zacks Consensus Estimate of 22 cents but were down from 70 cents in the year-ago quarter.
Sales in the third quarter were down 1% year over year to $271.6 million but beat the Zacks Consensus Estimate of $254.1 million.
Horizon Pharma PLC Price and Consensus
Horizon Pharma PLC Price and Consensus | Horizon Pharma PLC Quote
Quarter in Detail
The Orphan unit recorded revenues of $117.4 million, up 64% from the year-ago period. The strong performance was backed by solid net sales of Ravicti, which generated sales of $50.9 million in the quarter, up 21% year over year driven by continued conversion from older-generation nitrogen-scavenger therapies, as well as the addition of treatment-naïve patients due to the recent label expansion. We remind investors that the FDA approved a supplemental New Drug Application for Ravicti to expand the age range for chronic management of urea cycle disorders in patients to two months and older from two years and older.
Additionally, Procysbi contributed to the performance with its net sales of $33.5 million. Actimmune sales in the reported quarter were $29.2 million, up 17% year over year driven by the continued efforts to establish the role of Actimmune in a broader range of chronic granulomatous disease patients.
The Rheumatology unit generated sales of $58.1 million, up 44% year over year. Also, Krystexxa sales in the quarter were strong and came in at $42.8 million, up 67% year over year, driven by continued strong year-over-year vial demand.
Primary Care garnered revenues of $96.1 million, down 41% year over year. The decline in net sales was due to the implementation of a new contracting model, in order to secure broader inclusion of the company’s primary care medicines on formularies. Sales also declined sequentially as a result of lower average net realized price.
Net sales of Pennsaid2%, Duexix and Vimovo were $48.3 million, $31.6 million and $15.1 million, respectively, in the reported quarter.
2017 Guidance
The company raised its outlook for 2017 and now expects sales in the range of $1.030-$1.055 billion, compared with the earlier estimate of $1.010-$1.045 billion.
The company continues to invest in the expansion of Krystexxa into nephrology indication and expects sales growth of more than 50% in 2018. The guidance includes assumption of lower net average net realized price beginning in the second half primarily resulting from the U.S. Government's Health Resource and Services Administration's Final Rule on 340B drug ceiling price implementation scheduled for July 2018.
Horizon Pharma is significantly increasing investments in one its key growth drivers, Krystexxa and expects net sales for Krystexxa of more than $400 million in 2017 driven by higher demand. The company expects continued double-digi t net sales growth for Ravicti in 2017, with room for additional uptake due to the recent label expansion. Sales of Procysbi will decline to the divestiture of European rights. Sales of Actimmune are projected to grow around 5%.
Other Updates
The company announced that the first patient was enroled and infused in phase III confirmatory clinical trial evaluating teprotumumab for the treatment of thyroid eye disease, or TED. We remind investors that the company acquired River Vision earlier and added its biologic candidate teprotumumab to its pipeline.
In June 2017, Horizon Pharma sold the marketing rights for Procysbi and Quinsair in the Europe, the Middle East and Africa regions to Chiesi Farmaceutici S.p.A. as the company focuses on higher-return businesses.
Meanwhile, the company is working on expanding Actimmune’s label. An investigator-initiated study at the Moffitt Cancer Center is underway and enrolling patients. The study is evaluating Actimmune in combination with Roche Holdings’ (RHHBY - Free Report) Herceptin, Perjeta, and Taxol and aims to determine the optimal dosing and treatment combination in certain advanced breast cancer patients. The company has collaborated with the Fox Chase Cancer Center to evaluate Actimmune in combination with a Bristol-Myers Squibb Company’s (BMY - Free Report) Opdivo in a phase I dosing study for the treatment of kidney and bladder cancer. The study continues to enroll its fourth cohort of patients and expects to have dose level results by the end of the year. The National Cancer Institute has plans to evaluate Actimmune in combination with Merck & Co’s (MRK - Free Report) Keytruda to treat cutaneous t-cell lymphoma patients. This phase II study remains on track to begin. The company remains on track to submit a supplemental New Drug Application in the first quarter of 2018 to expand the age range for chronic management of urea cycle disorders (UCDs) to birth and older.
Our Take
Horizon Pharma’s third-quarter results were impressive with the company beating on both the top and bottom-line estimates. Moreover, the increase in sales guidance for 2017 was encouraging as well. We expect Krystexxa, Ravicti and Actimmune to drive further growth.
The acquisition of teprotumumab has further diversified the company’s portfolio.
Zacks Rank
Horizon Pharma currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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