Cadence Pharma Reports In-Line Loss, Beats Rev - Analyst Blog

By Zacks Equity Research,

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Shares of Cadence Pharmaceuticals, Inc. ( CADX ) remained unchanged after the release of third quarter earnings but declined 3.83% % in the next trading session. Overall, shares lost 3.3% since the company reported third quarter results. 

The company posted a net loss of 8 cents per share in the third quarter of 2013, in line with the Zacks Consensus Estimate. The loss reported in the year-ago quarter was 19 cents per share. 

Cadence Pharma reported net revenues of $28.9 million, up 108.3% year over year, and surpassing the Zacks Consensus Estimate of $27.0 million. 

Quarter in Detail

Sales growth was driven by a significant jump in the sales of vials of Ofirmev which grew 82.0% year over year to 2.5 million. Sales benefited from the increasing demand for non-narcotic analgesics from the hospital market.

We note that Ofirmev is Cadence Pharma's proprietary intravenous formulation of acetaminophen. It is indicated to manage pain with adjunctive opioid analgesics as well as for the reduction of fever.

The exclusive rights to Ofirmev in the U.S. and Canada were acquired by Cadence Pharma from Bristol-Myers Squibb (BMY) in 2006. The drug is marketed by Bristol-Myers as Perfalgan in Europe and other parts of the world.

As of Sep 30, 2013, Cadence Pharma had over 4,600 unique customer accounts, up 33% from the year-ago quarter.

Gross margin came in at 66%, up from 56% in the year-ago quarter driven by price increases and lower freight costs.

Operating expenses grew 10% to $24.8 million due to higher legal fees.

Outlook Upped Again

Cadence Pharma upped its guidance again. Based on strong sales of Ofirmev in the first nine months of 2013, Cadence Pharma expects net revenue for Ofirmev in the range of $105.0 - $107.0 million in 2013, up from the earlier guidance range of $103.0 million - $105.0 million. The Zacks Consensus Estimate stands at $105.0 million.

Our Take

We remind investors that the U.S. Food and Drug Administration (FDA) asked Cadence Pharma to add a "black box" warning to the label of Ofirmev injection.

The "black box" warning will include information regarding doses and the risk of liver injury associated with doses that exceed the recommended daily limit. However, the company does not expect the warning to impact sales.

We are encouraged by the momentum in Ofirmev sales and the consecutive increase in guidance .

Cadence Pharma currently holds a Zacks Rank #3 (Hold). Other stocks that currently look attractive include Forest Laboratories ( FRX ), Salix Pharmaceuticals ( SLXP ) and NPS Pharmaceuticals, Inc . ( NPSP ). All three carry a Zacks Rank #2 (Buy).

CADENCE PHARMA (CADX): Free Stock Analysis Report

FOREST LABS A (FRX): Free Stock Analysis Report

NPS PHARMA INC (NPSP): Free Stock Analysis Report

SALIX PHARM-LTD (SLXP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: BMY , CADX , FRX , NPSP , SLXP

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