Horizon Pharma Sinks on Missed Earnings and Guidance
Horizon Pharma PLC (NASDAQ: HZNP) saw its shares hit a 52-week low on Monday after the company released its first-quarter financial results. The company said that it had $0.21 in EPS and $220.9 million in revenue versus consensus estimates from Thomson Reuters that called for $0.23 in EPS and $247.92 million in revenue. The same period from last year had $0.25 in EPS and $204.69 million in revenue.
Revenue was driven by strong growth from the Horizon’s orphan and rheumatology business units, offset by lower sales in the primary care business unit.
During the quarter, Horizon announced that it received approval for its supplemental New Drug Application (sNDA) with the U.S. Food and Drug Administration (FDA) for Ravicti to expand the age range for chronic management of urea cycle disorders (UCDs) from a current range of two years and older to a new range of two months and older.
In terms of guidance for the 2017 full year, the company expects continued strong net sales growth for both its orphan and rheumatology businesses, driven primarily by strong patient growth in Krystexxa, Ravicti, and Procysbi. In its primary care business unit, Horizon is assuming net sales of more than $300 million.
Specifically, the company dropped its guidance to a range of $1.00 billion to $1.035 billion from the previous range of $1.24 billion to $1.29 billion. The consensus estimates are calling for $2.14 in EPS and $1.26 billion in revenue for the 2017 full year.
On the books, cash and cash equivalents totaled $603.4 million at the end of the quarter, compared to $509.1 million at the end of December 2016.
Timothy P. Walbert, Chairman, President and CEO, commented:
We generated strong first-quarter performance in our orphan and rheumatology business units, with KRYSTEXXA and RAVICTI achieving record net sales; however, our primary care business unit performed well below our expectations. The lower primary care business unit results were related to the implementation of the contracting model with pharmacy benefit managers, which has not performed in accordance with our expectations. While we are proactively addressing this underperformance, with greater visibility into the impact of this transition, we are revising our full-year 2017 net sales and adjusted EBITDA guidance.
Shares of Horizon Pharma were last trading down about 30% at $10.81, with a consensus analyst price target of $27.40 and a 52-week trading range of $10.35 to $23.44.