Pharmacyclics Attains 52-Week High - Analyst Blog


Shares of Pharmacyclics Inc. ( PCYC ) reached a 52-week high of $154.89 during the trading session on Feb 21. The closing price of $151.61 reflects a robust year-to-date return of 70.7%.

Pharmacyclics, with a Zacks #2 Rank (Buy), has a market cap of $11.2 billion. Average volume of shares traded during the trading session stood at 1,013,709.

What's Driving the Price?

The stock has been positively impacted by the strong fourth quarter 2013 financial results announced by the company on Feb 20. Pharmacyclics' fourth quarter 2013 earnings (including stock-based compensation expenses) of 82 cents per share beat the Zacks Consensus Estimate of 77 cents. Earnings were also up 46% on year-over-year basis.

Pharmacyclics also witnessed a 113% increase in fourth quarter net revenues, which came in at $123.6 million. Revenues were also well above the Zacks Consensus Estimate of $84 million. Quarterly revenues benefited from a massive jump in collaboration and license agreement revenues and the inclusion of Imbruvica sales.

In Nov 2013, Imbruvica was approved in the U.S. as a monotherapy for treating patients suffering from mantle cell lymphoma (MCL). The drug has been approved to treat MCL patients who have been treated at least once for the disease. Following the U.S. approval of Imbruvica for MCL, Pharmacyclics had earned $60 million in the form of milestone payment from partner Johnson & Johnson ( JNJ ). The drug contributed around $13.6 million in the final quarter of 2013.

Imbruvica is expected to drive long-term growth at Pharmacyclics. Earlier in the month, the drug received approval for its second indication when it was approved in the U.S. as a monotherapy for patients suffering from chronic lymphocytic leukemia (CLL) with a history of receiving at least one prior therapy earlier in the month. Pharmacyclics is evaluating Imbruvica for other oncology indications.

Premium Valuation Justified

On a price-to-sales basis, Pharmacyclics is trading at 45.4x, reflecting a huge premium to the peer group average of 4.1x. On a price-to-book basis, the stock is also trading at a premium to the peer group average. Given the company's strong fundamentals, the premium valuation is justified.

Other Stocks to Consider

Currently, companies like Alexion Pharmaceuticals, Inc. ( ALXN ) and Gilead Sciences Inc. ( GILD ) are also worth considering. While Alexion holds a Zacks Rank #1 (Strong Buy), Gilead Sciences carries a Zacks Rank #2.

ALEXION PHARMA (ALXN): Free Stock Analysis Report

GILEAD SCIENCES (GILD): Free Stock Analysis Report

JOHNSON & JOHNS (JNJ): Free Stock Analysis Report

PHARMACYCLICS (PCYC): Free Stock Analysis Report

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Zacks Investment Research

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

This article appears in: Investing , Business , Stocks

Referenced Stocks: ALXN , GILD , JNJ , PCYC

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