It has been about a month since the last earnings report for Horizon Therapeutics (
HZNP Quick Quote HZNP - Free Report) . Shares have lost about 1.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Horizon Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Horizon's Q1 Earnings Miss Estimates, Revenues Beat
Horizon reported first-quarter 2021 adjusted earnings of 3 cents per share, which declined from the year-ago quarterly earnings of 40 cents. Earnings also missed the Zacks Consensus Estimate of 7 cents per share.
Quarterly sales of $342.4 million were down 3.8% year over year. The top line beat the Zacks Consensus Estimate of $326.5 million. Sales were down in the first quarter due to supply disruptions resulting from U.S. government-mandated COVID-19 vaccine orders.
Quarter in Detail
Sales in the Orphan segment were $257.5 million, up 4.9% from the prior-year figure, driven by the continued growth of drugs like Krystexxa, Ravicti, Procysbi and Actimmune. The segment represented almost 75% of total first-quarter net sales.
Krystexxa sales increased 14% year over year to $106.7 million. Tepezza generated net sales worth $2.1 million in the first quarter. Tepezza net sales were negatively impacted by a short-term supply disruption due to U.S. government-mandated COVID-19 vaccine orders.
Ravicti sales were $72.8 million in the quarter, up 19% year over year.
First-quarter 2021 net sales in the Inflammation segment were $84.9 million, down 23% year over year.
Adjusted research and development expenses were $49 million, up from $20.8 million in the year-ago quarter. Adjusted SG&A expenses were $218.6 million, up from $193.1 million in the year-ago quarter.
The company expects 2021 net sales between $2.75 billion and $2.85 billion, compared with the previous expectation of $2.70 billion and $2.80 billion. The Zacks Consensus Estimate stands at $2.81 billion. The updated guidance ranges incorporate Viela Bio, Inc, which was acquired in March 2021.
The company expects Tepezza net sales to be greater than $1.275 billion and Krystexxa net sales to be above $500 million, both unchanged from the previous expectation.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
At this time, Horizon Therapeutics has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Horizon Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.