Back to top

Analyst Blog

Zacks Equity Research

Earnings Beat at Cubist Pharma

CBST

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Cubist Pharmaceuticals Inc.’s (CBST - Analyst Report) third quarter 2012 adjusted earnings of 68 cents per share breezed past the Zacks Consensus Estimate of 46 cents. Results in the quarter were helped by strong sales of antibiotic injection, Cubicin (daptomycin). Adjusted earnings were short of the year-ago adjusted earnings by 10 cents.

The Third Quarter in Details

Revenue in the reported quarter climbed 18% to $238.2 million. Revenues were short of the Zacks Consensus Estimate of $242 million. Cubicin, which is approved in the US and several other markets for the treatment of severe bacterial infections of the skin and bloodstream, accounted for the bulk of the revenues reported in the quarter. Net sales of the product in the US climbed 12% to $208.3 million in the reported quarter.

We note that Cubicin’s quarterly sales crossed the $200 million mark in the US for the second successive quarter.Net product revenues from international sales of the product jumped 22% to $12 million in the third quarter of 2012.

Entereg, which became a part of Cubist Pharma’s portfolio following the December 2011 acquisition of Adolor Corporation, delivered revenues of $10.1 million in the quarter, up 4.1% sequentially. Entereg is currently marketed to expedite gastrointestinal recovery following bowel resection surgery.

During the quarter, Cubist Pharma recognized $7.2 million as service revenues pertaining to the two-year agreement with Optimer Pharmaceuticals Inc. for the co-promotion of Optimer’s Dificid (fidaxomicin) in the US. Dificid is approved for treating patients suffering from clostridium difficile-associated diarrhea (CDAD). Dificid is available in the US since July 2011. Cubist Pharma also recorded $0.65 million as other revenues in the third quarter of 2012.

Both research and development (R&D) expenses and selling, general & administrative expenses (SG&A) were on the upswing during the reported quarter. While R&D expenses climbed 52% to $70.2 million due to the company’s efforts to develop its pipeline, SG&A expenses climbed 12.4% to $40.4 million.

2012 Projection Tweaked

Cubist Pharma now expects revenues for 2012 in the range of $915-$930 million (previous guidance: $900–$930 million). The Zacks Consensus Estimate is at the highest end of the guidance range provided by the company and currently stands at $930 million.  Net US sales of Cubicin are expected in the range of $800- $815 million (previous guidance: $790–$850 million). International Cubicin sales for 2012 are projected in the range of $45-50 million (previous guidance: approximately $45 million). Net sales of Entereg in the US are expected to be around $40 million (previous guidance: $40 - $45 million). Service revenues and other revenues are still expected to add up to $25 million in 2012.

Cubist Pharma lowered its 2012 research and development guidance. R&D expenses for 2012 are now expected in the range of $265-$275 million (old guidance: $275–$285 million). Selling, general and administrative expenses in 2012 are expected to be around $170 million (previous guidance: $165-$175 million). Adjusted operating income is forecasted in the range of $270 - $285 million for 2012 (previous guidance: $265-$275 million).

Our Recommendation

Currently, we have a Neutral recommendation on Cubist Pharma. The stock carries a Zacks #3 Rank (short-term “Hold” rating).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%