Pernix Reports Loss in 4Q
Pernix Therapeutics Holdings, Inc (PTX) posted a loss of 2 cents per share in the fourth quarter of 2012 compared to earnings of 15 cents per share in the year-ago quarter. The Zacks Consensus Estimate stood at earnings of 6 cents per share.
Revenues in the fourth quarter of 2012 came in at $18.2 million, down 14.9% from the year-ago quarter and missed the Zacks Consensus Estimate of $24 million. The decline in revenues was primarily due to weak sales in Pernix’s cough & cold product line.
Selling, general and administrative (SG&A) expenses in the fourth quarter of 2012 increased 59.7% from the year-ago quarter to $11.1 million primarily due to the company’s new gastroenterology sales force along with expenses related to the development of the over the counter (:OTC) cough and cold candidate Dr. Cocoa.
In addition, acquisitions related expenses (acquisitions of Cypress Pharmaceuticals, Hawthorn Pharmaceuticals, and Somaxon Pharmaceuticals) and an increase in corporate infrastructure costs to support growth objectives were also responsible for the increase in SG&A.
We note that Pernix completed the acquisitions of Cypress Pharmaceuticals (a privately-owned generic pharmaceutical company) and Hawthorn Pharmaceuticals (a privately-owned branded pharmaceutical company) at the end of Dec 2012. In early Mar 2013, Pernix completed the acquisition of Somaxon Pharmaceuticals.
For 2012, revenues increased 1% to $61.3 million, missing the Zacks Consensus Estimate of $67 million. Branded products contributed 55% of product revenues while generics accounted for the remaining 36%.
Loss per share came in at 2 cents per share in 2012 while the Zacks Consensus Estimate was a profit of 6 cents per share. In 2011, the company earned 34 cents per share.
Outlook
Pernix projects revenues between $125 million and $135 million in 2013 .The Zacks Consensus Estimate of $131 million is well within the company’s guidance range. The projected revenue range includes contribution of recent acquisitions of Cypress Pharmaceuticals, Hawthorn Pharmaceuticals, and Somaxon Pharmaceuticals.
Pernix expects to launch Dr. Cocoa, an OTC chocolate flavored cough and cold offering in 2013. This product line includes daytime, nighttime, cough, cold and fever formulations.
Pernix Therapeutics currently carries a Zacks Rank #3 (Hold). Pharma stocks which appear to be attractive include Avanir Pharmaceuticals (AVNR), Furiex Pharmaceuticals (FURX) and Shire (SHPG). All three carry a Zacks Rank #2 (Buy).
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