Horizon (HZNP) Q2 Earnings Top, Krystexxa & Uplizna Boost Sales
Horizon Therapeutics plc HZNP delivered second-quarter 2023 adjusted earnings of $1.20 per share, which beat the Zacks Consensus Estimate of $1.12. The company reported adjusted earnings of $1.07 per share in the year-ago quarter.
Quarterly revenues of $945 million surged 8% year over year, owing mostly to the encouraging performance of its key drugs, Krystexxa, Tepezza and Uplizna, in the second quarter of 2023. Revenues surpassed the Zacks Consensus Estimate of $916 million.
Year-to-date, the shares of Horizon have declined 8.5% against the industry’s 13% decline.
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Quarter in Detail
Horizon reported financial results in a single segment owing to the wind-down of the inflammation business beginning in the fourth quarter of 2022.
In the unified segment, Tepezza sales accounted for 47% of the net sales, amounting to $445.5 million, which missed the Zacks Consensus Estimate of $537.5 million in the reported quarter, representing a 7% year-over-year decline. However, the second quarter of 2023 witnessed a 10% sequential increase in revenues generated from Tepezza sales.
Krystexxa sales, the key growth driver for the reported quarter, rose 46% year over year to $244 million, surpassing the Zacks Consensus Estimate of $238 million. The phenomenal performance of the drug was driven by Horizon’s efforts for demand generation, stakeholder education and treatment adherence.
Ravicti sales were $88.4 million in the quarter, up 17% year over year, but missed the Zacks Consensus Estimate of $91.9 million.
Uplizna sales were $68.1 million in the quarter, up 76% year over year, beating the Zacks Consensus Estimate of $52.9 million. The staggering performance of the drug was reportedly driven by strong commercial execution related to demand generation and new patient starts, education of existing prescribers and strong adherence to maintenance treatment. The company is currently planning multiple international launches of Uplizna in 2023.
Procysbi sales were $53.1 million in the quarter, up 11% year over year, missing the Zacks Consensus Estimate of $59 million.
Actimmune sales were $29 million in the quarter, down 3% year over year, missing the Zacks Consensus Estimate of $33.2 million.
Adjusted research and development expenses were $139.8 million, up 47% from the year-ago quarter. Adjusted selling, general and administrative expenses were $361 million, up 2.5% from the year-ago quarter.
The company had cash, cash equivalents and investments worth $2.46 billion as of Jun 30, 2023 compared with $2.31 billion as of Mar 31, 2023.
Other Updates
We would like to remind investors that Horizon is set to be acquired by biotech giant Amgen AMGN for $116.5 per share in cash or $27.8 billion. However, in May 2023, the Federal Trade Commission (FTC) filed a lawsuit in Federal Court to halt Amgen’s $28 billion acquisition of Horizon.
Per the FTC, if the acquisition is allowed to go through, a large-cap giant like Amgen could leverage its position with insurance companies and pharmacy benefit managers to entrench monopoly positions for two of Horizon's key products — Tepezza and Krystexxa. Per the agency, the drugs currently face little to no competition in the market and are sold at very high prices to patients.
Horizon, however, stated that the objective of the acquisition deal is to accelerate the availability of important rare disease medicines with significant unmet needs to more patients worldwide. HZNP also stated that it has no plans to bundle any of its rare disease medicines, thereby addressing the FTC’s potential concern.
In the earnings press release, Horizon reaffirmed that it continues to expect the closing of the Amgen transaction by mid-December, subject to the denial of the FTC’s request for a preliminary injunction.
Horizon Therapeutics Public Limited Company Price, Consensus and EPS Surprise
Horizon Therapeutics Public Limited Company price-consensus-eps-surprise-chart | Horizon Therapeutics Public Limited Company Quote
Zacks Rank and Stocks to Consider
Horizon currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the overall medical sector are J&J JNJ and ADC Therapeutics ADCT, each carrying a Zacks Rank #2 (Buy) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 90 days, the Zacks Consensus Estimate for J&J’s 2023 earnings per share has increased from $10.67 to $10.75. During the same period, the estimate for JNJ’s 2024 earnings per share has increased from $11.01 to $11.29. Year-to-date, shares of JNJ have lost 2.1%.
JNJ beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 5.58%.
In the past 90 days, the Zacks Consensus Estimate for ADC Therapeutics’ 2023 loss per share has narrowed from $2.84 to $2.61. During the same period, the estimate for ADC Therapeutics’ 2024 loss per share narrowed from $2.56 to $2.55. Year-to-date, shares of ADCT have lost 58.3%.
ADCT beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average negative earnings surprise of 3.25%.
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