. The company said that is unable to predict how much longer the probe will continue or what the outcome of it will be but expects it might incur "significant" costs in connection with the investigation, regardless of the outcome. Horizon Pharma added that it might also become subject to similar investigations by other government bodies.
Horizon Pharma slips after disclosing DOJ subpoena, Q4 results
Shares of Horizon Pharma (HZNP) slipped in afternoon trading after the company reported quarterly results and disclosed that it received a government subpoena requesting information related to its patient assistance programs. QUARTERLY RESULTS: Before the market open, Horizon Pharma reported fourth quarter adjusted earnings per share of 64c on revenue of $244.5M, beating analysts' consensus estimates of 62c and $240.82M, respectively. The company also backed its guidance for fiscal year 2016, saying it expects revenue of $1.025B-$1.05B and adjusted EBITDA of $505M-$520M. Analysts expect Horizon Pharma to report revenue of $1.03B for FY16. GOVERNMENT SUBPOENA: In a regulatory filing released today, Horizon Pharma said that it received a subpoena in November 2015 from the U.S. Attorney's Office for the Southern District of New York asking for documents and information related to its patient assistance programs. The company said that is unable to predict how much longer the probe will continue or what the outcome of it will be but expects it might incur "significant" costs in connection with the investigation, regardless of the outcome. Horizon Pharma added that it might also become subject to similar investigations by other government bodies. On its Q4 earnings conference call, Horizon Pharma Chairman and CEO Timothy Walbert elaborated on the subpoena, saying that there are "no specific allegations" against the company and that it is complying with the investigation. STREET RESEARCH: UBS said that Horizon Pharma's weakness related to the subpoena is a buying opportunity. The analyst added that any investigation into the company will take years to play out and that fundamentals at Horizon Pharma continue to improve. PRICE ACTION: In afternoon trading, Horizon Pharma slipped 10.87% to $17.64.
Lin believes that following the price correction, the risk/reward profile of the stock has become balanced, and mentioned that better than anticipated customer adds and operating leverage drove a 12 percent earnings beat in 4Q15.
The company reported 65 percent year-on-year revenue growth, ahead of the expectations and guidance, driven by robust year-on-year active customer growth of 58 percent and per customer spending growth of 6 percent year-on-year.
"New active customer adds reached a historical high at 8.4mn, driven by aggressive promotions, with a declining customer loss rate," Lin stated.
Non-GAAP EPS grew 53 percent year-on-year to Rmb1.18. However, the analyst believes that the 1Q16 guidance of 37-41 percent year-on-year growth was conservative and below consensus.
"According to Analysys, VIPS' MAU growth remained resilient in January. Given a higher comparison base, slowing macro and lack of big promotions, we think the company may be conservatively guiding 1Q16 vs, our forecast of +41 percent year on year growth," Lin pointed out.
In addition, channel checks suggest that although Vipshop might have become marginally more expensive since 2014, it was still the most competitive flash sales channel