Auxilium Pharmaceuticals, Inc.
) reported fourth quarter 2013 earnings (including stock-based
compensation expense) of 19 cents per share, beating the Zacks
Consensus Estimate of 15 cents per share. The company had
reported earnings of 14 cents per share in the year-ago
Fourth quarter revenues increased 56% to $125.9 million, above
the Zacks Consensus Estimate of $111 million. Revenues were
boosted by the recently acquired subsidiary, Actient, which
contributed $43.7 million to fourth quarter 2013 revenues. Higher
Xiaflex sales in the U.S. also contributed to the increase which
was partially offset by lower Testim U.S. revenues.
The company reported full year earnings of 31 cents per share,
beating the Zacks Consensus Estimate of earnings of 26 cents per
share. Earnings came in at 4 cents per share in 2012. Full year
revenues increased 32% to $400.7 million beating the Zacks
Consensus Estimate of $384 million.
Quarter in Detail
Lead product Testim posted sales of $59.0 million in the
fourth quarter of 2013, down 1% year-over-year. Testim revenues
in the U.S. declined 2% to $57.1 million. Sales included
inventory stocking worth $7 million - $8 million. Sales were
negatively impacted by slowing growth of the testosterone
replacement therapy (TRT) market.
The TRT gel market continues to slow down and the company said
that the market grew just 1.4% in 2013, down from 31.4% growth in
2012. Moreover, so far in 2014 the market has shrunk 12.5%.
Xiaflex U.S. revenues grew 13% to $19.7 million.
While Testopel generated revenues of $25 million, Edex
revenues were $8.9 million. Both are products gained through the
Research and development expenses for the reported quarter
declined 2.3% to $12.9 million. Selling, general and
administrative expenses grew 58.5% to $64.5 million mainly due to
the Actient acquisition as well as higher marketing and
advertising spend related to the launch of Xiaflex for the
Peyronie's indication and Stendra.
Auxilium Pharma expects global net revenues of $450 million to
$490 million in 2014. While R&D spend is expected in the
range of $50 million to $55 million, SG&A spend is expected
in the range of $255 million to $265 million.
Net income is expected in the range of $45 million - $50
million. Auxilium Pharma remains on track to generate cost
synergies of at least $20 million from the Actient acquisition by
Auxilium Pharma's fourth quarter results were strong barring
Testim's performance. Xiaflex sales improved and the Actient
acquisition boosted revenues. Xiaflex should do well in the
Peyronie's indication as well.
We are encouraged by the company's efforts to build its
urology portfolio. Stendra, in-licensed from
), is the first new chemical entity in the PDE5 inhibitor market
in ten years. A fast onset of action (30 minutes), no specific
meal restrictions, the ability to be taken with modest alcohol
consumption, and a favorable side effect profile could help
Stendra pick up share.
Auxilium Pharma currently carries a Zacks Rank #1 (Strong
Buy). Other well-positioned companies in the health care sector
BioSpecifics Technologies Corp.
) with both being Zacks Rank #1 stocks.
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