Concordia Disappoints on Earnings and Management Shift

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Concordia International Corp. (NASDAQ: CXRX) announced its third-quarter financial results before the markets opened on Monday, as well as a key change in leadership.

The company posted $0.69 in earnings per share (EPS) and $185.5 million in revenue, versus consensus estimates from Thomson Reuters of $1.04 in EPS and revenue of $206 million. In the same period of last year, Concordia posted EPS of $1.46 and $94.91 million in revenue.

The North America segment revenue was $45.5 million, versus $90.6 million in the third quarter of 2015. The decrease was due to competitive market pressures. International segment revenue was $137.4 million, representing 9.3% decrease year over year.

Orphan Drug segment revenue totaled only $2.6 million, compared with $2.4 million last year.

On the upside, since this time last year the company’s International segment has launched 24 products. These include branded and generic therapies for the treatment of prostate cancer, pain, depression and obesity.

The company announced that its board of directors has appointed Allan Oberman as its new chief executive officer and selected Jordan Kupinsky as board chair. The new appointments are effective November 14, and they are replacing Mark L. Thompson, who served as both chairman and CEO.

The company released a statement with the earnings report:

Concordia’s International segment, on a constant currency basis, delivered consistent results in the third quarter compared to the second quarter of 2016. In addition, the International segment remains on track to meet or exceed our target of 60 new product launches by the fourth quarter of 2018. The Company continues to assess the competitive environment affecting the North America and International segments, and is implementing actions to manage these challenges. Due to recent pressures from generic competition on Plaquenil and Nilandron, as well as increased pressure on Donnatal® from competition in the category and what we consider to be an illegal commercial product, we have experienced variability in forecasting the North American business. Additionally, with the recent leadership changes, the Company has determined it will suspend its financial guidance. Concordia’s management team is committed to expeditiously evaluating all aspects of its business to ensure appropriate actions are taken to rebuild value for all stakeholders.

Shares of Concordia were last trading down 34% at $2.10, with a consensus analyst price target of $14.56 and a 52-week trading range of $2.05 to $44.00.