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Horizon (HZNP) Q2 Earnings Miss Estimates, Revenues Rise Y/Y

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Horizon Therapeutics plc (HZNP - Free Report) reported second-quarter 2022 adjusted earnings of $1.07 per share, which missed the Zacks Consensus Estimate of $1.34. The company had reported adjusted earnings of $1.45 per share in the year-ago quarter.

Quarterly revenues of $876.4 million rose 5% year over year, owing to sales growth in the Orphan segment especially solid growth in Krystexxa, which is approved for treating uncontrolled gout. Sales, however, missed the Zacks Consensus Estimate of $936 million.

Shares of Horizon plunged in pre-market trading on Wednesday owing to the weaker-than-expected earnings results. The stock has declined 23.7% so far this year compared with the industry’s decrease of 22.6%.

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Image Source: Zacks Investment Research

Quarter in Detail

Horizon reports financial results under two segments, namely Orphan (previously known as the Orphan and Rheumatology segment) and Inflammation (previously known as the primary care segment).

Sales in the Orphan segment were $841.3 million, up 13% from the prior-year figure, driven by the strong sales growth in Krystexxa, as well as the continued growth of drugs like Uplizna, Ravicti, Actimmune and Tepezza. The segment represented around 96% of the total second-quarter net sales.

Krystexxa sales rose 29% year over year to $167.8 million. Tepezza generated net sales of $479.8 million in the second quarter, up 6% year over year. Tepezza, which is approved for treating thyroid eye disease, was relaunched in the United States in April 2021 after sales were negatively impacted by a short-term supply disruption due to U.S. government-mandated COVID-19 vaccine orders.

Ravicti sales were $75.7 million in the quarter, up 11% year over year.

Procysbi sales were $47.7 million in the quarter, down 4% year over year.

Uplizna sales were $38.6 million in the quarter, up 167% year over year.

Actimmune sales were $30 million in the quarter, up 8% year over year.

However, net sales in the Inflammation segment were $35.1 million, down 59% year over year.

Adjusted research and development expenses were $95.4 million, down from $127.5 million in the year-ago quarter. Adjusted SG&A expenses were $352.3 million, up from $281 million in the year-ago quarter.

The company had cash, cash equivalents and investments worth $1.89 billion as of Jun 30, 2022, compared with $1.64 billion as of Mar 31, 2022.

2022 Guidance

Horizon lowered its net sales guidance for full-year 2022.

The company now expects net sales in the range of $3.53-$3.60 billion compared with the previous expectation of $3.9-$4.0 billion for 2022. The Zacks Consensus Estimate for the metric is pegged at $3.97 billion. This might have hurt investors’ sentiments and also resulted in the stock going down in pre-market trading on Wednesday.

For 2022, Tepezza’s net sales percentage growth is now expected in the high-teens, compared with the previous expectation of mid-30s percentage growth.

Recent Updates

Last month, the FDA approved Horizon’s supplemental biologics license application (“BLA”) for the combination use of Krystexxa. The FDA approved Krystexxa injection plus methotrexate to help more people with uncontrolled gout achieve a complete response to therapy.

Krystexxa, until now, was approved as a monotherapy for the treatment of adult patients with chronic gout refractory to conventional therapies, also called uncontrolled gout.

In March 2022, the FDA granted priority review to the above-mentioned sBLA for Krystexxa.

Horizon Therapeutics plc Price, Consensus and EPS Surprise

Horizon Therapeutics Public Limited Company Price, Consensus and EPS Surprise

Horizon Therapeutics plc price-consensus-eps-surprise-chart | Horizon Therapeutics plc Quote

Zacks Rank & Stocks to Consider

Horizon currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the biotech sector include Beam Therapeutics Inc. (BEAM - Free Report) , Atara Biotherapeutics, Inc. (ATRA - Free Report) and Precision BioSciences, Inc. (DTIL - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Beam Therapeutics’ loss per share estimates narrowed 0.7% for 2022 and 0.8% for 2023 in the past 60 days.

Earnings of Beam Therapeutics have surpassed estimates in three of the trailing four quarters and missed on the remaining occasion. BEAM delivered an earnings surprise of 1.80%, on average.

Atara Biotherapeutics’ loss per share estimates narrowed 0.6% for 2022 and 13.3% for 2023 in the past 60 days.

Earnings of Atara Biotherapeutics have surpassed estimates in two of the trailing four quarters and missed the same on the other two occasions. ATRA delivered an earnings surprise of -12.51%, on average.

Precision BioSciences’ loss per share estimates narrowed 5.8% for 2022 and 16.2% for 2023 in the past 60 days.

Earnings of Precision BioSciences have surpassed estimates in each of the trailing four quarters. DTIL delivered an earnings surprise of 76.15%, on average.

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