) shares have been inching up (1.2% over two trading sessions)
following the company's first quarter fiscal 2014 (ending Dec
2013) earnings report. Mallinckrodt reported adjusted earnings of
88 cents per share, beating the Zacks Consensus Estimate of 67
cents. Earnings were above the year-ago figure of 65 cents per
Net sales for the quarter were $540.2 million, up 7.2% from the
year-ago quarter. Revenues were in line with the Zacks Consensus
Estimate. Revenues were mainly driven by the performance of sales
from the Specialty Pharmaceuticals segment.
Quarter in Details
Mallinckrodt reports revenues under two segments, Specialty
Pharmaceuticals and Global Medical Imaging.
Sales from the Specialty Pharmaceuticals segment were $309.5
million in the reported quarter, up 18.9%. This segment comprises
of two sub-segments, Brands and Generics and Active
Pharmaceutical Ingredients (API). Net sales in Brands were $59.6
million, up 27.9%, mainly driven by Exalgo ($36.2 million). Net
sales in Generics and API were $249.9 million, up 16.9%. This was
driven by net sales of methylphenidate HCl extended-release
tablets ($56.3 million). The company upped its fiscal 2014
guidance for methylphenidate HCl extended-release tablets to at
least $150 million (old guidance: at least $120 million).
Net Specialty Pharmaceuticals sales are now expected in the range
of $1.3 billion to $1.35 billion, up from the earlier guidance of
$1.22 billion to $1.27 billion.
Sales from the Global Medical Imaging segment were $218.6 million
in the reported quarter, down 4.8%. This segment includes
Contrast Media and Delivery Systems (CMDS) as well as Nuclear
Imaging sub segments. Net sales in CMDS were $111.6 million, down
8% due to pricing pressures. Net sales in the Nuclear Imaging
segment were $107.0 million, down 1.2% due to rising costs and
supply chain challenges.
Net Global Medical Imaging segment sales are now expected in the
range of $850 million to $900 million, down from the earlier
guidance of $885 million to $930 million.
In the first quarter fiscal 2014, research and development
(R&D) expenses were $39.0 million, up 1.6% from the year-ago
Selling, general and administrative (SG&A) expenses remained
flat at $146.2 million. Reduction in expenses through
restructuring was offset by increased administrative costs.
Last month, Mallinckrodt's pain candidate, PENNSAID 2%, received
FDA approval for the treatment of osteoarthritis-related pain of
the knee. The company will launch the drug this week.
Mallinckrodt has several late-stage candidates in its pipeline.
Xartemis XR, is under FDA review for the treatment of moderate to
severe acute pain. A decision is expected by the end of this
month. MNK-155 has completed a phase III study for
moderate-to-moderately severe acute pain. A New Drug Application
(NDA) application will be filed in expected in the second half of
Ups 2014 Outlook
Mallinckrodt increased its guidance for fiscal 2014. The company
expects net sales in the range of $2.2 billion - $2.3 billion in
fiscal 2014, up from the earlier guidance of R2.15 billion -
$2.25 billion. The Zacks Consensus Estimate currently stands at
Adjusted earnings per share are expected in the range of $2.65
to $2.95 per share, up from the previous guidance range of $2.45
- $2.65 per share. The Zacks Consensus Estimate currently stands
at $2.86 per share.
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Mallinckrodt carries a Zacks Rank #2 (Buy). Some equally
attractive stocks include
AcelRx Pharmaceuticals, Inc.
). Meanwhile, a better ranked stock in the generics sector is
Dr. Reddy's Laboratories Ltd.
) with a Zacks Rank #1 (Strong Buy).