Cubist Pharmaceuticals, Inc.
) recently announced its strategic plans for the next five years at
its Investor Day. Cubist Pharma discussed goals for top- and
bottom-line growth and its future pipeline development
Cubist Pharma expects to generate around $2 billion of global
revenues in 2017 on the back of organic growth. The company had
raised its 2012 global sales guidance following a good first
quarter to a band of $900 million to $930 million, from $880
million to $910 million earlier.
Cubist Pharma expects Cubicin sales in the US alone to exceed $1
billion in 2017. In 2011, Cubist Pharma reported Cubicin US sales
of $698.8 million. On the first quarter earnings call, the company
projected US Cubicin sales of $790-$850 million for 2012.
Meanwhile, Cubist Pharma expects Entereg sales of about $100
million in 2017. The company projects 2012 Entereg sales in the
range of $40-$45 million after clocking $9.4 million in the first
quarter of 2012.
The company stated it would focus on the late stage pipeline
candidates CXA-201, CB-315, and CB-5945. The company also expects
to have four new product candidates in late-stage clinical trials
by 2017. The company expects its research and development expense
to account for 25% of total revenues by 2017.
Cubist Pharma also intends to file one investigational new drug
(IND) application every 18 months. Merger and acquisition and
in-licensing activities and other partnerships should help the
company boost its pipeline.
Moreover, the company intends to generate $700 million in
non-GAAP annual adjusted operating income by 2017. Cubist Pharma
expects selling, general and administrative expense and overall
cost of goods sold to be approximately 20% each of total revenues
We believe that Cubicin is doing well and has the potential to
reach its billion dollar sales goal in the US by 2017. We are also
impressed by the upcoming development programs, as revealed by the
company. With Cubicin and Entereg slated to deliver revenues of
$1.1 billion in 2017, the balance $900 million in revenues should
come from new products.
Successful development of the late-stage candidates would allow
the company to achieve its $2 billion revenue guidance. We would be
more comfortable with the company's total revenue targets once we
see phase III data on the late-stage candidates.
We currently have a Neutral recommendation on Cubist Pharma. The
stock carries a Zacks #3 Rank (Hold rating) in the short run.
CUBIST PHARM (CBST): Free Stock Analysis Report
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