Auxilium Pharmaceuticals, Inc.
) reported earnings (including stock-based compensation expense)
of 14 cents per share in the second quarter of 2013, below the
year-ago earnings of 16 cents but well above the Zacks Consensus
Estimate of a loss of 6 cents per share.
Revenues, which increased 29% to $100.5 million, were well
above the Zacks Consensus Estimate of $91 million. Results were
boosted by the recently acquired subsidiary, Actient, which
contributed $27.3 million to second quarter 2013 revenues.
Quarter in Detail
Lead product Testim posted sales of $54.4 million in the
second quarter of 2013, down 15% year-over-year. Testim revenues
in the U.S. declined 15% to $53.2 million. Sales were negatively
impacted by slowing growth of the testosterone replacement
therapy (TRT) market.
Auxilium Pharma said that the TRT market growth rate was much
slower than the company's expectations. U.S. scrips declined 18%
in the reported quarter. Testim's market share in the second
quarter of 2013 declined to 14% from 17.8% in the year-ago
The company terminated its U.S. co-promotion agreement for
). Auxilium Pharma also announced its plans for its new sales
force allocation. While the Primera sales force will promote
Testim and Edex covering 150 territories, the Innovia sales force
will cover 60 territories and will sell Testopel and Osbon
ErecAid. The Innovia sales force will also be responsible for
selling Xiaflex for the Peyronie's disease indication, once
approved. The Agilis sales force, covering 47 territories, will
be responsible for selling Xiaflex for Dupuytren's
Meanwhile, Xiaflex U.S. revenues grew 26% to $15 million.
Auxilium Pharma is working on expanding Xiaflex' label. The
company is currently seeking FDA approval for Peyronie's disease
- a response should be out by Sep 6, 2013.
Research and development expenses for the reported quarter
increased 35.8% to $12.9 million due to higher spending on
activities related to the Xiaflex multi-cord studies. Selling,
general and administrative expenses grew 29% to $50.7 million
mainly due to the Actient acquisition, higher marketing and
advertising spend related to the potential launch of Xiaflex for
the Peyronie's indication and higher legal costs.
2013 Guidance Updated
Auxilium Pharma now expects revenues of $363 million to $405
million (old guidance: $360 million to $415 million). Testim
guidance was narrowed to $210 million to $225 million (old
guidance: $210 million to $240 million). U.S. Xiaflex sales
guidance of $55 million to $65 million remained unchanged.
The company now expects ex-U.S. and deferred revenues for
Xiaflex of $13 million to $15 million (old guidance: $10 million
to $15 million). Meanwhile, Testopel and other revenues are
expected in the range of $45 million - $55 million and $40
million - $45 million, respectively.
Net income is expected in the range of $23 million - $28
Auxilium Pharma remains on track to generate cost synergies of
about $20 million from the Actient acquisition with the majority
of these synergies expected in 2014.
Auxilium Pharma's second quarter results were strong barring
Testim's performance. Xiaflex sales improved and the Actient
acquisition boosted revenues. Testim sales, while down from the
year-ago period, did improve sequentially. Testim sales could
improve in the second half of 2013 based on managed care
Auxilium Pharma currently carries a Zacks Rank #2 (Buy). We
expect investor focus to remain on Testim sales and the
regulatory status of Xiaflex for the Peyronie's indication. In
our view, Auxilium Pharma's chances of gaining approval for the
Peyronie's indication are high.
Other companies that currently look well-positioned include
Questcor Pharmaceuticals, Inc.
NPS Pharmaceuticals, Inc.
AUXILIUM PHARMA (AUXL): Free Stock Analysis
GLAXOSMITHKLINE (GSK): Free Stock Analysis
NPS PHARMA INC (NPSP): Free Stock Analysis
QUESTCOR PHARMA (QCOR): Free Stock Analysis
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