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Horizon Pharma (HZNP) Q3 Earnings & Sales Beat, Shares Rise

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Horizon Pharma (HZNP) Q3 Earnings & Sales Beat, Shares Rise

Shares of Horizon Pharma (HZNP) rise almost 16%, owing to record quarterly sales during the third quarter of 2018.

Horizon Pharma plc HZNP reported better-than-expected results for the third quarter of 2018.  Following the news, the company’s shares went up 16%. Horizon Pharma’s stock price has increased 53.7% year to date, against the industry’s decline of 14%.

The company reported third-quarter adjusted earnings of 65 cents per share, which beat the Zacks Consensus Estimate of 50 cents and were higher than 26 cents reported in the year-ago quarter.

The company reported record quarterly sales of $325.3 million, up 20% year over year. The top line also beat the Zacks Consensus Estimate of $315 million.

Quarter in Detail

The company realigned its structure to operate its strategic growth business — orphan and rheumatology — separately from its primary care business. Thus with effect from the second quarter of 2018, the company is reporting its financial results as two separate segments — the orphan and rheumatology segment, and the primary care segment. The company expects the new structure to help it better allocate resources in developing products for unmet treatment needs of patients with rare diseases.

Sales of the orphan and rheumatology segment were $219.9 million, up 25.3% from the prior-year quarter, driven by continued strong growth of Krystexxa, Ravicti and Procysbi. Krystexxa sales increased 64% year over year to $70.2 million. The company is making significant investments in the commercial expansion of Krystexxa, which is expected to drive future net sales growth and margin expansion over time.

Third-quarter 2018 net sales of the primary care segment were $105.4 million, up 10% year over year.

Adjusted research and development (R&D) expenses were 5.9% of net sales, and adjusted SG&A expenses were 39.3% of the same.

2018 Guidance Increased

Horizon Pharma expects sales to be $1.17-$1.2 billion.

The company expects Krystexxa sales to increase more than 65% year over year in 2018.

Other Updates

The company’s pipeline candidate teprotumumab is being developed for the treatment of thyroid eye disease (TED). The phase III confirmatory study, OPTIC, evaluating teprotumumab for the treatment of moderate-to-severe active TED, completed enrollment on Sep 4, 2018, and the top-line results are expected in the second quarter of 2019.

Horizon Pharma also presented a new phase II teprotumumab data that underscore the durable efficacy observed in thyroid eye disease.

The company is also working to maximize the role of Krystexxa to help more patients, including adapting its MIRROR immunomodulation study based on promising recent data to support potential for registration.  The company expects to begin enrolling patients into the adapted protocol in the second quarter of 2019.

The company is pursuing two development programs — HZN-003 and PASylated uricase technology — for next-generation biologics for uncontrolled gout, to support and sustain the company’s market leadership in uncontrolled gout. 

 

Horizon Pharma Public Limited Company Price, Consensus and EPS Surprise

 

Horizon Pharma Public Limited Company Price, Consensus and EPS Surprise | Horizon Pharma Public Limited Company Quote

Zacks Rank & Stocks to Consider

Horizon Pharma has a Zacks Rank #3 (Hold).

Some top-ranked stocks worth considering are Bristol-Myers Squibb Company BMY, Eli Lilly and Company LLY and Merck & Co. Inc. MRK. While Bristol-Myers sports a Zacks Rank #1 (Strong Buy), Lilly and Merck carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bristol-Myers’ earnings per share estimates have increased from $3.59 to $3.84 for 2018 and from $3.83 to $4.07 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 11.99%.

Lilly’s earnings per share estimates have increased from $5.42 to $5.47 for 2018 and from $5.69 to $5.78 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 10.03%. Shares of the company have increased 29.9% year to date.

Merck’s earnings per share estimates have increased from $4.26 to $4.34 for 2018 and from $4.58 to $4.71 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 3.96%. Shares of the company have increased 33.4% year to date.

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