Tag Archives: agn

Generic Drug Stocks Crash, As Endo Warns Of Price Erosion

Drugmaker Endo International ( ENDP ) plunged 39% Friday after it delivered a hefty guidance cut driven by weakness in its generics business, dragging nearly every other generic-drug stock down with it. Endo actually beat analysts’ consensus in Q1, but it cut its full-year earnings guidance by 23% — now $4.50 to $4.80 a share — and trimmed the revenue outlook by 11% to a range of $3.87 billion to $4.03 billion. In the company’s earnings release, CEO Rajiv De Silva blamed “new competitive entrants, including for Voltaren Gel; greater-than-expected price erosion across the Generics sector; and delays on regulatory actions related to certain Endo products.” IBD’s Take: How healthy are shares of Endo and Teva and how do they stack up vs. rivals? Find out at IBD Stock Checkup It was the second factor that rattled the rest of the generics industry. Teva Pharmaceutical Industries ( TEVA ) stock fell 6.8% to 50.22, and hit a 19-month low of 50.01. Allergan ( AGN ), already staggering from the cancellation of its buyout by Pfizer ( PFE ), hit a two-year low of 195.50 and ended the day at 201.63, down 4.1%, even though it’s selling its generics business to Teva. Perrigo ( PRGO ), which cut its own guidance last month, fell 4.8%, to 92.42. Smaller drugmaker Akorn ( AKRX ), down as much as 20%, ended the day off 7.9%, at 22. Akorn, which has fallen way behind on its accounting due to internal issues, late Friday finally set dates for its Q4 and Q1 earnings releases, for May 9 and May 17, respectively. Leerink analyst Joseph Schwartz wrote in a research note that Endo’s problems read through most directly to Teva, Akorn and Perrigo, and more moderately to Allergan. Essentially, whoever’s done the most price-hiking on products representing more than 5% of generic sales lately is in the most trouble. Referring to industrywide data from IMS, Schwartz wrote: “Based on our analysis, Akorn has taken 13 price increases matching the above criteria (44% of IMS generic sales), Perrigo eight (18% of generic IMS sales) and Endo took 17 (17% of generic IMS sales).” Teva, meanwhile, is due to report its own Q1 earnings and guidance on Monday morning, and Allergan is due before the open the following day. Endo itself got at least four downgrades from Wall Street analysts Friday, mostly to neutral but one to underweight. It ended the day at 16.17, a seven-year closing low.

Forget Allergan: Pfizer Has Its Sights On This Cancer Drugmaker

Less than a month after Pfizer ( PFE ) scrapped its $160 billion takeover of Allergan ( AGN ) over new anti-inversion rules, the drug giant is eyeing a possible bid for cancer biotech Medivation ( MDVN ), Reuters reported late Tuesday. Pfizer has approached Medivation for talks, according to Reuters. That could lead to an offer that would top a $9.3 billion bid for Medivation from France’s Sanofi ( SNY ). Medivation has rejected Sanofi’s $52.50-share bid as undervaluing the company, which is best known for prostate cancer drug Xtandi. Medivation shares have been trading well above that Sanofi offer price, closing down 0.8% to 57.52 on the stock market today. Medivation rose above 60 late Tuesday on the Pfizer report. Pfizer stock rose 2.7% to 33.70 during the regular session, breaking out of a consolidation, after the pharmaceutical king reported its best quarterly earnings per share gain in more than six years. Pfizer’s 32% EPS rise , better than expected, benefited from several one-time factors, including its recent Hospira takeover.

Pfizer Raises Guidance As Lead Drugs Drive Q1 Beat; Stock Up

Big pharma Pfizer ( PFE ) rose early Tuesday after it beat Wall Street’s Q1 estimates and raised its guidance, as the company moved on after it and Allergan ( AGN ) last month called off their mammoth $160 billion merger. Before the open, Pfizer said earnings, excluding one-time items, rose 32% over the year-earlier quarter to 67 cents a share, beating analysts’ consensus by 12 cents. Revenue increased 20% to $13 billion, beating consensus by about $1 billion. The accounting in Q1 was complicated by several factors, including the Sept. 3 acquisition of generic drugmaker Hospira. “If we look closely to year-over-year revenue growth, it is worth mentioning that out of $2.1 billion growth vs. Q1 ’15 (or $2.9 billion of operational growth or 26% year-over-year) favorable FX (foreign-exchange rates) contributed $729 million, and inclusion of Hospira contributed $1.2 billion,” wrote Evercore ISI analyst Mark Schoenebaum in an email to clients. “Excluding FX and Hospira, Pfizer stand-alone revenue increased by $1.7 billion (15% year-over-year growth). “There is also an additional factor favorably contributing to revenues — $900 million due to an additional five selling days this quarter. Excluding this impact, operational year-over-year revenue growth comes as 8%, which is still very good growth for Pfizer with its relatively mature portfolio of products.” Still, none of these factors except foreign exchange contributed to Pfizer’s full-year guidance increase. The company added $2 billion to its revenue guidance, now $51 billion to $53 billion, and 18 cents to its EPS range, now $2.38 to $2.48. Pfizer said that about $1 billion of the revenue hike and 12 cents of the EPS gain were due to improved operating performance. Pfizer stock was up 2.4% in early trading on the stock market today , near 33.60. A number of important drugs also beat consensus, including breast-cancer treatment Ibrance, epilepsy drug Lyrica, and pneumococcal vaccine Prevnar 13. Enbrel —  Amgen ‘s ( AMGN ) rheumatoid-arthritis drug, which Pfizer markets outside the U.S. — also beat expectations, as it did domestically for Amgen in its Q1 report last week. Nonetheless, investors’ minds may be elsewhere, wrote Credit Suisse analyst Vamil Divan in a research note. “We expect investors to view the quarter as a positive but maintain their focus on the strategic outlook of the company following the failed Allergan deal and ahead of a decision on a potential split of Pfizer ,” he wrote. Pfizer and Allergan, based in low-tax Ireland, called off their merger , which would have been the industry’s largest ever, after the U.S. Treasury unveiled new rules to curb tax inversion deals.