Tag Archives: hznp

Horizon Pharma Spikes On Earnings Beat; Depomed Rises On Upgrade

Specialty drugmaker Horizon Pharma ( HZNP ) jumped in trading Monday after its Q1 earnings topped Wall Street’s estimates and the company affirmed guidance, while its former buyout target Depomed ( DEPO ) was also up sharply on an upgrade. Horizon said earnings climbed 89% over the year-earlier quarter to 34 cents a share, beating analysts’ consensus by 4 cents, according to Thomson Reuters. Sales rose 81% to $204.7 million, about $7 million above estimates. Horizon affirmed its 2016 sales guidance, first issued in January, of $1.025 billion to $1.05 billion, with EBITDA of $505 million to $520 million. It did not offer EPS guidance. It said that Q2 sales should comprise 22% to 23% of the year’s revenue, and 21% to 22% of EBITDA. Horizon’s continued affirmation of 2016 guidance surprised Wall Street, after it guided to below-consensus Q1 numbers on April 12. Analyst consensus is still below Horizon’s guidance, with $1 billion in sales and $482 million in EBITDA. “Although there remains a high degree of skepticism by some about the quarterly progression necessary to meet these targets, we would note that the Q1 performance — and Q2 guidance (which is for revenues to reach 22-23% of the full year versus 23% for 2015 and 22% for 2014) — are very much in line with the standard seasonality,” wrote Cowen analyst Ken Cacciatore in a research note. Horizon stock was up 14% in afternoon trading on the stock market today , near 15. Though possessing a solid EPS Rank of 79, the stock has lost half its value since last July as various parties have accused it of predatory pricing practices. One such party was Depomed, which Horizon tried unsuccessfully to buy last year. Depomed’s management is now under siege from activist investor Jeffrey Smith, largely because of its unwillingness to be bought. It didn’t help Depomed’s management that last week the company missed its Q1 expectations while raising its expense guidance, erasing the stock’s gains from Smith’s involvement. However, on Monday Mizuho Securities upgraded it to buy from neutral and added a buck to its price target, now 19. “We think there is now an attractive entry point into a stock with some positive momentum and takeout prospects ahead,” wrote Mizuho analyst Irina Koffler in her research note. Depomed stock was up nearly 16% in afternoon trading Monday.

Valeant Dives As Bondholder Seeks Default; Buyout Buzz Lifts Medivation

Valeant Pharmaceuticals ( VRX ) fell in late trade after Valeant said bondholders submitted a default notice, citing delays in the drugmaker’s annual report. Meanwhile, Medivation ( MDVN ) jumped late on a Bloomberg report , citing sources, that the drugmaker rejected a takeover overture from Sanofi ( SNY ). Valeant fell more than 6% in early after-hours action, pared losses to 4%. Shares closed up 2% at 31.99. Dow Jones, which initially reported the news, said Centerbridge Partners was a bondholder seeking the default notice. Valeant has until June 11 to file its 10-K annual report or be compelled to repay bonds early. Valeant has said it will file by April 29. Centerbridge, which holds some $250 million in Valeant debt, may be seeking concessions rather than a default. Meanwhile, Medivation jumped more than 9% after hours following a 1.1% gain to 45.73 at the close. Sanofi was little changed after hours. Sanofi hasn’t ruled out a hostile bid for Medivation, Bloomberg reported. Sanofi would like to expand its cancer drug portfolio. It was a wild day for some drugmakers. Horizon Pharmaceuticals ( HZNP ) dived 26%, close to its October lows. Horizon gave  weak sales guidance . Meanwhile, Clovis ( CLVS ) fell 5.4% to 14.24 after tumbling intraday to 12.25. An FDA advisory panel overwhelmingly opposed early approval for Clovis’  lung cancer drug, saying the agency should await phase 3 data for rociletinib. The stock had fallen 17.7% on Friday and 4.5% on Monday after the panel’s documents were released  

‘Egregious’ Depomed Soars After Activist Starboard Targets Drugmaker

Shares of specialty drugmaker Depomed ( DEPO ) jumped Friday after an activist investor took a stake in the company and challenged the management. Starboard Value LP, which has led high-profile efforts to shake up Darden Restaurants ( DRI ) and Yahoo ( YHOO ), announced that it had acquired a 9.8% stake in Depomed and sent a scathing letter to the company’s CEO, James Schoeneck, and the board of directors. “Specifically, we have significant concerns regarding serious corporate governance deficiencies, questionable capital allocation decisions, and egregious actions taken by the board to stymie strategic interest in acquiring Depomed,” wrote Starboard member Jeffrey Smith in the letter. The last item referred to the board’s poison-pill provision adopted last year when Horizon Pharma ( HZNP ) attempted a hostile takeover, which was ultimately foiled . That seemed to be at the root of Starboard’s complaint, and Smith charged that Depomed’s board is making further moves to limit shareholder power. Smith cited a proposal to reincorporate Depomed, currently headquartered in Newark, Calif., in the state of Delaware, mentioned in the recent  notice of the annual shareholder meeting to be held May 18. “Upon further review, we identified unconventional provisions that indicate management and the board are using the reincorporation proposal as a tactic to further entrench themselves by suppressing shareholder rights that currently exist under Depomed-California,” Smith wrote. Starboard filed a Record Date Request Notice asking to call a special shareholder meeting. Depomed issued a brief response saying that the company “welcomes open communications with its shareholders” but that it hadn’t received any communication from Starboard before the letter. It urged shareholders to take no action. The moved came three days after Smith resigned as chairman of Darden Restaurants, a position he gained in 2014 after leading a similar, successful fight to replace Darden’s board. Starboard is also currently attempting to replace the board of Yahoo. Depomed stock shot up more than 12% in morning trade on the stock market today , near 17. The stock had been trading for less than half its 52-week high — 33.74 back on July 21 — an unusually big drop, even by drug stock standards. Yahoo stock rose fractionally intraday, while Darden Restaurants was little changed.