Cubist Pharmaceuticals, Inc
) second quarter 2012 earnings (excluding special items but
including stock-based compensation expense) came in at 68 cents per
share, up 28.3% from the year-ago period.
Reported earnings came in at 58 cents, compared to a loss of 34
cents in the year-ago quarter. The earnings results comfortably
surpassed the Zacks Consensus Estimate of 48 cents. Results in the
quarter were primarily helped by strong sales of antibiotic
injection, Cubicin (daptomycin) in the US.
Revenue in the second quarter of 2012 climbed 30.0% to $230.6
million, beating the Zacks Consensus Estimate of $226.0
The Quarter in Detail
Cubicin, which is approved in the US and several other markets
for the treatment of severe bacterial infections of the skin and
bloodstream, accounted for the bulk of the revenues reported in the
Net product sales in the US climbed 24.5% to $209.9 million,
with Cubicin accounting for a major part of the sales. Cubicin net
sales in the US increased 18.7% to $200.2 million due to strong
volume growth in the reported quarter. We remind investors that
this is the first time that Cubicin quarterly sales crossed the
$200 million mark in the US.
Net revenues from international sales of Cubicin jumped 46.7% to
$11.4 million, in the second quarter of 2012, due to the impressive
performance in some of
) areas, mainly France, Turkey and Brazil. Total Cubicin sales
climbed 20% in the reported quarter to $212 million.
Entereg, which became a part of Cubist Pharma's portfolio
following the December 2011 acquisition of Adolor Corporation,
delivered revenues of $9.7 million in the quarter. Cubist Pharma is
working on growing Entereg sales. The company has increased its
call targets and expects to accelerate the Entereg launch.
Meanwhile, Cubist Pharma is looking to expand Entereg's label.
In April, 2012, the company announced successful results from a
phase IV study of Entereg in patients undergoing radical
cystectomy. Cubist Pharma plans to submit a supplemental New Drug
Application (sNDA) with the US Food and Drug Administration (FDA)
by this year for the same indication. Entereg is currently marketed
to expedite gastrointestinal recovery following bowel resection
During the quarter, Cubist Pharma recognized $8.7 million as
service revenues pertaining to its two-year agreement with
Optimer Pharmaceuticals Inc.
) for the co-promotion of Optimer's Dificid (fidaxomicin) in the
US. The service revenue recognized includes a $5 million bonus for
achieving sales target. The drug, developed by Optimer, is approved
for treating patients suffering from c. difficile-associated
diarrhea (CDAD). Dificid is available in the US since July 2011.
Cubist Pharma also recorded $0.7 million as other revenues in the
second quarter of 2012.
Notably, during the reported quarter, Cubist Pharma started
enrolling patients in one of the two pivotal phase III studies
evaluating the safety and efficacy of CB-315 in patients suffering
from CDAD. The company also presented positive results from a phase
II study of CB-5945 in patients suffering chronic non-cancer pain
and opioid-induced constipation. Cubist Pharma plans to start a
phase III study with CB-5945 by year end for this indication.
2012 Projection Tweaked
Cubist Pharma increased its forecast for adjusted operating
income to $265-$275 million from $260-$265 million.
Cubist Pharma lowered its research and development guidance by
$10 million to $275-$285 million (old guidance: $285-$295 million).
The company shifted the planned $10 million cost to 2013 plan due
to timing issues.
Currently, we have a Neutral recommendation on Cubist Pharma.
While we are impressed with Cubicin's performance and the second
quarter results, we remain concerned about Cubist Pharma's overt
dependence on Cubicin. The stock carries a Zacks #3 Rank (Sell
rating) in the short run.
CUBIST PHARM (CBST): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis
OPTIMER PHARMAC (OPTR): Free Stock Analysis
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