Avanir Loss In Line with Ests, Revs Up


Avanir Pharmaceuticals, Inc. (AVNR) reported second quarter fiscal 2014 net loss per share of 8 cents, in line with the Zacks Consensus Estimate but narrower than the year-ago loss of 12 cents.

Revenues in the reported quarter rose 55% year over year to $26.9 million, below the Zacks Consensus Estimate of $30 million.

Quarter in Detail

Net revenues included Nuedexta revenues, co-promotion revenues and royalty revenues from Abreva. Net Nuedexta revenues grew 47.4% year over year to $24.4 million. Nuedexta is approved for the treatment of patients suffering from pseudobulbar affect (PBA).

Research and development (R&D) expenses were $9.9 million, up 11.5% year over year. Selling and marketing expenses rose 17.7% year over year to $18.9 million. General and administrative expenses increased 22.6% year over year to $8.6 million.

2014 Guidance

Avanir gave its expense guidance (excluding cost of product sales) for the year ending Sep 30, 2014, in the range of $140 million to $150 million.

Pipeline Update

Avanir is looking to expand Nuedexta’s label. Nuedexta is currently being studied for two additional indications in phase II, one for the treatment of agitation in Alzheimer's disease (top-line data - second half of this year) and the other for levodopa induced dyskinesia (:LID) in patients suffering from Parkinson's disease. 

Avanir joined forces with OptiNose for the development and commercialization of AVP-825 for the treatment of acute migraine in Jul 2013. A New Drug Application (:NDA) for AVP-825 was filed in Jan 2014. The Prescription Drug User Fee Act (:PDUFA) action date is on Nov 26, 2014.

Another candidate, AVP-786 is being developed for the treatment of neurologic and psychiatric disorders.  Avanir will commence a study this year on AVP-786 for the treatment of resistant major depressive disorder.

Avanir carries a Zacks Rank #3 (Hold). Revenues from Nuedexta were encouraging. Avanir is also making efforts to expand Nuedexta’s label. We also note that the data from the two phase II studies on Nuedexta will be out this year. Positive news on the PDUFA action date regarding AVP-825 will be encouraging as it will reduce Avanir’s dependence on Nuedexta, its solitary approved  drug .

Some better-ranked stocks worth considering include Alexion Pharmaceuticals, Inc. (ALXN), Allergan Inc. (AGN) and Gilead Sciences Inc. (GILD). Alexion Pharma and Gilead Sciences carry a Zacks Rank #1 (Strong Buy) while Allergan holds a Zacks Rank #2 (Buy).

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