Horizon Therapeutics plc HZNP, previously known as Horizon Pharma plc, reported second-quarter 2019 adjusted earnings of 49 cents per share, which beat the Zacks Consensus Estimate of 38 cents and increased from 48 cents reported in the year-ago quarter.
The company reported quarterly sales of $320.6 million, up 6% year over year. The top line also beat the Zacks Consensus Estimate of $299 million.
On May 2, 2019, shareholders of the company approved the change of the company’s name to Horizon Therapeutics. This move caters to the company’s long-term strategy to develop and commercialize innovative medicines addressing rare diseases, which currently have very few effective treatment options.
Horizon Therapeutics’ share price has rallied 35.6% year to date against the industry’s decline of 2.1%.
Quarter in Detail
The company realigned its structure to operate two separate businesses. Thus, with effect from the second quarter of 2018, the company has been reporting financial results in two separate segments — the orphan and rheumatology segment, and the Inflammation (previously known as the primary care segment) segment. Sales of the orphan and rheumatology segment were $223.5 million, up 11% from the prior-year quarter’s figure, driven by continued strong growth of Krystexxa, Procysbi, Rayos and Actimmune. Krystexxa sales increased 36% year over year to $79.8 million. Beginning January 2019, the company no longer recognizes certain ex-U.S. sales of Ravicti, Buphenyl and Lodotra following the divestiture of those rights in 2018.
Second-quarter 2019 net sales of the Inflammation segment were $97.1 million, down 4% year over year.
Adjusted R&D expenses and adjusted SG&A expenses were 6.9% and 45.4% of net sales, respectively.
The company now expects full-year 2019 net sales to be $1.28-$1.30 billion, up from the previous guidance of $1.26-$1.28 billion.
Other Pipeline Updates
The company’s pipeline candidate teprotumumab is being developed for the treatment of thyroid eye disease (TED).
In July, the company submitted a Biologics License Application (BLA) for teprotumumab for the treatment of active TED to the FDA. Horizon Therapeuticshas requested a Priority Review status for the application, which, if granted, could result in a six-month review process. If approved, teprotumumab would be the first and only approved treatment for active TED.
Horizon Therapeutics is evaluating the use of methotrexate to enhance the response rate to Krystexxa through the MIRROR study in adults living with uncontrolled gout. The MIRROR study is designed to support the potential for registration of Krystexxa and was initiated in June 2019.
In July 2019, the FDA accepted the new drug application (NDA) for Procysbi delayed-release oral granules in packets. If approved, this new dosage form would provide another administration option to patients, in addition to the currently available Procysbi delayed-release capsules, which are FDA-approved for children aged one year or older and adults living with nephropathic cystinosis.
Horizon Therapeutics plans to initiate a clinical trial in the second half of 2019, evaluating the effect of Krystexxa on serum uric acid levels in kidney transplant patients with uncontrolled gout.
Zacks Rank & Stocks to Consider
Horizon Therapeutics currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks are Acorda Therapeutics Inc. ACOR, Axovant Sciences Ltd. and Epizyme Inc. EPZM. While Acorda and Axovant carry a Zacks Rank #1 (Strong Buy), Epizyme carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Acorda’s loss per share estimates have narrowed from $3.59 to $2.74 for 2019 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters, the average being 69.68%.
Axovant’s loss per share estimates have narrowed from $7.00 to $5.34 for 2019 and from $6.48 to $3.59 for 2020 in the past 60 days.
Epizyme’s loss per share estimates have narrowed from $1.80 to $1.79 for 2020 in the past 90 days. The company delivered a positive earnings surprise in the trailing four quarters, the average being 22.15%.
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