Cubist Pharmaceuticals, Inc.'s
(
CBST
) first quarter 2012 earnings (excluding special items but
including stock-based compensation expense) came in at 82 cents per
share up 51.9% from the year-ago period.
Reported earnings came in at 45 cents, up 32.4% year-over-year.
The Zacks Consensus Estimate for the first quarter was 41 cents.
Results in the quarter were helped by strong sales of antibiotic
injection, Cubicin (daptomycin).
Revenue in the first quarter of 2012 climbed 30.0% to $211.7
million, beating the Zacks Consensus Estimate of $210.0
million.
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
quarter.
Net product sales in the US climbed 26.3% to $194.2 million.
Most of the US sales came from Cubicin. Net sales of the product in
the US climbed 20.0% to $184.7 million due to strong volume growth
in the reported quarter.
Net revenues from international sales of Cubicin jumped 52% to
$12.7 million in the first quarter of 2012, due to the impressive
performance in Japan, Canada, France, Turkey and Brazil. Total
Cubicin sales climbed 22% in the reported quarter to $197.4
million.
Entereg, which became a part of Cubist Pharma's portfolio
following the December 2011 acquisition of Adolor Corporation,
delivered revenues of $9.4 million in the quarter. Cubist Pharma is
working on growing Entereg sales. During the first half of 2012,
the company intends to focus initially on the institutions where
Entereg is used regularly. The company then intends to focus on
larger markets.
Meanwhile, Cubist Pharma is looking to expand Entereg's label so
that it can be used to accelerate the time to upper and lower GI
recovery in patients undergoing radical cystectomy. The company
intends to seek approval for this additional indication later this
year. Entereg is currently marketed to expedite gastrointestinal
recovery following bowel resection surgery.
Net revenues from international sales of Cubicin jumped 52% to
$12.7 million in the first quarter of 2012, due to the impressive
results form Japan, Canada, France, Turkey and Brazil. Total
Cubicin sales climbed 22% in the reported quarter to $197.4
million.
During the quarter, Cubist Pharma recognized $3.7 million as
service revenues pertaining to its two-year agreement with
Optimer Pharmaceuticals Inc.
(
OPTR
) for the co-promotion of Optimer's Dificid (fidaxomicin) in the
US. The drug, developed by Optimer, is approved for treating
patients suffering from
c. difficile
-associated diarrhea. Dificid is available in US markets since July
2011. Cubist Pharma recorded $1.2 million as other revenues in the
first quarter of 2012.
2012 Projection
Tweaked
Inspired by the strong first quarter performance, Cubist Pharma
made some changes in its guidance for 2012. The biopharmaceutical
company increased its 2012 revenue guidance to $900 - $930 million
(old guidance: $880-$910 million), driven by strong Cubicin sales
in the US. The Zacks Consensus Estimate of $908 million is towards
the lower end of the revised guidance range.
Net US sales of Cubicin are expected in the range of $790 - $850
million (old guidance: $770-$795 million). Adjusted operating
income is now forecasted in the range of $260 - $265 million (old
guidance: $245 - $250 million) for 2012.
Cubist Pharma maintained other aspects of its guidance, as
provided in January 2012. This includes international Cubicin sales
of approximately $45 million, Entereg sales in the US of $40 - $45
million, service and other revenues of up to $25 million, research
and development costs of $285 - $295 million and selling, general
and administrative expenses of $165-$175 million.
Our Recommendation
Currently, we have a Neutral recommendation on Cubist Pharma.
While we are impressed with Cubicin's performance and the first
quarter results, we remain concerned about Cubist Pharma's
overdependence on Cubicin. The stock carries a Zacks #4 Rank (Sell
rating) in the short-run.
CUBIST PHARM (
CBST
): Free Stock Analysis Report
OPTIMER PHARMAC (
OPTR
): Free Stock Analysis Report
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