Tag Archives: akrx

Akorn Rebounds Further As Q1 Meets Views, Big Investor Ups Stake

Specialty drugmaker Akorn ( AKRX ) was up in early trading Tuesday after its belated Q1 earning report met Wall Street’s expectations and a major investor tripled its stake in the firm. Late Monday, Akorn reported its first-quarter results just a week after it announcing  Q4 and 2015 results , along with restated 2014 earnings, after a year-long repair of its accounting system. It also affirmed the 2016 guidance it issued last month, calling for at least 80% earnings growth over the previous year, with revenue up 8% to 10%. “Akorn’s guidance continues to exclude new approvals, and to us the growth outlook here is going to be about two things: (i) converting the current pipeline of 86 ANDAs (generic-drug applications) in an environment where we are seeing accelerating FDA approval activity, and (ii) pursuing a strategy of targeting bolt-on deal opportunities,” RBC Capital Markets analyst Randall Stanicky wrote in a research note. Akorn said that adjusted net income rose 20% over the year-earlier quarter to 54 cents a share, in line with analysts’ consensus. Revenue rose 18% to $268 million, also in line. The financial uncertainty cut Akorn’s stock price by two-thirds between its April 2015 high and its March 18 low, but since then it’s climbed nearly 70%. In the stock market today , Akorn stock rose 7.6% in heavy volume, to 29.91, and hit a four-month high. Bloomberg also reported that investment management firm Paulson & Co. has become Akorn’s second-largest shareholder , with $219 million in holdings. The report said Paulson also bought into Endo International ( ENDP ), another specialty pharma that fell out of favor with Wall Street after issuing guidance this month that  disastrously missed  estimates, with a Paulson spokeswoman saying many specialty pharma stocks have been oversold.

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.

Akorn Releases Long-Delayed 2015 Report, 2016 Guidance; Stock Jumps

Shares of generic drugmaker Akorn ( AKRX ) soared Tuesday morning after the company released preliminary 2015 financials and 2016 guidance — its first financial report in over a year. Last spring, the formerly top-rated Akorn discovered material weaknesses in its accounting that led it to say that it would have to restate its 2014 results. It spent so long investigating and fixing its problems that it had to get an extension from the SEC to avoid delisting last year. It’s pledged to file all necessary financial reports by May 9. On Tuesday, it issued its unaudited report as well as 2016 guidance. Akorn said that it posted $985 million in sales last year, about $14 million above analysts’ consensus, according to Thomson Reuters. Earnings excluding one-time items were $1.93, a penny below consensus. Akorn still hasn’t officially restated 2014 earnings, so it didn’t provide year-over-year comparisons, but the company said that it expects $35 million to be taken off both revenue and income. It had previously reported earnings of $1.16 a share on $654 million in revenue. The company also issued full-year guidance, though it was below expectations. Akorn said that revenue should be about $1.06 billion to $1.08 billion, with EPS of $2.10 to $2.20. The latest consensus called for $1.08 billion and $2.25, respectively. Nonetheless, Akorn stock was up 36%, above 25. On Friday, shares hit their lowest point since August 2013, below 18. Bad news was already priced into the stock, Guggenheim analyst Louise Chen said in a research note. “(The 2016) numbers include no new launches, and ’15 included $0.07 in competitive pricing costs,” Chen wrote. “New launches and no incremental competition for ephedrine sulfate and embutal could drive upside to Akorn’s ’16 guidance.” Akorn held a highest-possible IBD EPS Rank of 99 by its last official earnings report, and the new numbers make it look likely to retain a high ranking despite its problems. The company focuses on generic drugs in ophthalmics, creams and other formulations more shielded from competition than the standard pills. It was also seen as a possible acquisition target before its current troubles erupted. Image provided by Shutterstock .