Shares of Pharmacyclics Inc.
) 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%.
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PHARMACYCLICS (PCYC): Free Stock Analysis
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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
). The drug contributed around $13.6 million in the final quarter
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
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.
Gilead Sciences Inc.
) are also worth considering. While Alexion holds a Zacks Rank #1
(Strong Buy), Gilead Sciences carries a Zacks Rank #2.