Cubist Reports Impressive 4Q Sales

Cubist Pharmaceuticals Inc.’s (CBST - Analyst Report) unaudited net revenues for the fourth quarter of 2012 climbed 16% year over year to $245.9 million, driven by strong sales of its antibiotic injection, Cubicin (daptomycin). Cubicin is marketed in the US and several other markets for the treatment of severe bacterial infections of the skin and bloodstream.

Fourth quarter 2012 revenues were in line with the Zacks Consensus Estimate. Apart from revenues from Cubicin sales, total revenue at Cubist Pharma comprises Entereg sales and service revenues pertaining to the company’s agreement with Optimer Pharmaceuticals Inc. (OPTR - Analyst Report) to co-promote Dificid in the US for C. difficile acquired diarrhea.

Most of Cubicin sales in the final quarter of 2012 came from the US market ($216 million, up 14%). Cubicin also fared well in international markets with sales of the drug rising 34% to $14.5 million.

Entereg, which became a part of Cubist Pharma’s portfolio following the December 2011 acquisition of Adolor Corporation, delivered revenues of $10.9 million in the final quarter of 2012. During the quarter, Cubist Pharma recognized $3.7 million as service revenues pertaining to Dificid.

For full year 2012, total net revenue at Cubist Pharma climbed 23% to $926.4 million, again driven by strong Cubicin sales. Revenues in 2012 were in line with the Zacks Consensus Estimate. Cubicin fared well in the US (up 16% to $809.2 million) as well as internationally (up 38% to $50.5 million). Entereg sales and service revenues for 2012 were $40.2 million and $23.2 million, respectively. Detailed fourth quarter and full year 2012 results are scheduled on January 23, 2012.

Apart from announcing the sales figures, Cubist Pharma also provided an update on its promising pipeline candidate CXA-201. We note that CXA-201 is undergoing phase III studies for complicated intra-abdominal infections and complicated urinary tract infections caused by gram-negative bacterial infections.

The biopharmaceutical company expects to report top-line data from both the phase III studies in the second half of 2013. Cubist Pharma intends to seek US approval for both indications within approximately six months of reporting top line data from the studies.

We currently have a Neutral recommendation on Cubist Pharma. The stock carries a Zacks #3 Rank (Hold rating) in the short run. Stocks in the pharma sector that carry Zacks #1 Rank (Strong Buy) include Ironwood Pharma (IRWD - Snapshot Report) and Valeant Pharma (VRX - Snapshot Report).