Top-rated drug stocks Jazz Pharmaceuticals (JAZZ), United Therapeutics and Questcor Pharmaceuticals all missed fourth-quarter sales estimates Tuesday, sending their shares down significantly.
Jazz reported revenue of $236 million, up 28% from a year earlier but about $2 million below analysts' consensus. Profit minus one-time items also came up short at $1.72 a share, 6 cents below estimates but up 12% from the prior year.
CFO Kathryn Falberg said on the conference call that expenses rose in Q4 due to incentive-based compensation. The firm also faced foreign-exchange head winds in its increasingly global business, and an increased share count.
This was Falberg's last report, as Jazz announced she's leaving on March 9 to pursue other interests. She will be replaced by Senior Vice President Matthew Young.
Jazz's 2014 guidance was more upbeat. It said revenue will be $1.1 billion to $1.16 billion vs. consensus of $1.08 billion. It set the EPS range at $8 to $8.25, on the high side of the Street's $8.07.
There are still uncertainties in the near future, however. CEO Bruce Cozadd said Jazz still has not reached an agreement with the Food and Drug Administration on a Risk Evaluation and Mitigation Strategy for its leading drug Xyrem, which could potentially affect how many generic firms can make competing versions of the narcolepsy drug when it goes off patent. Cozadd also said a federal court had extended until October the discovery period in its patent dispute with generics firm Roxane Laboratories, leaving that overhang on the company as well.
Nonetheless, Jazz continues to diversify from Xyrem. Cozadd said it will start rolling out rare-disease drug Defitelio, which it just acquired with the buyout of Gentium (GENT), in Europe this year, and is working with the FDA on a pathway to U.S. approval.
Jazz's stock slid 8% in after-hours trading after closing up nearly 2% at a record high.
United's Top Drug Misses
United Therapeutics (UTHR) said Q4 sales totaled $289 million, up 19% from a year earlier but missing analysts' consensus by $6 million. It was the smallest revenue gain in two years.
The shortfall came in its lead drug, Remodulin, a treatment for pulmonary arterial hypertension. Its sales were about $7 million short of consensus at $120 million.
United's other drugs Tyvaso and Adcirca, for the same disease, were in line with the Street.
United Therapeutics lost 60 cents a share due to high stock-based compensation. Excluding those costs, it earned $3.19 per basic share. That beat Leerink analyst Joseph Schwartz's estimate, but he said that was largely due to a tax benefit from the unprofitability. He cut his price target to 116 from 118.
United's stock, up initially, closed down 4% at 100.50.
Questcor (QCOR) said Q4 sales totaled $243 million, up 51% vs. a year earlier and a bit over $1 million shy of consensus. The bottom line was better with earnings rising 53% to $1.67 a share, a penny over estimates. Questcor's stock fell about 5% late.
Neither United Therapeutics nor Questcor gave 2014 guidance.