Wider-Than-Expected Q4 Loss at Cadence Pharma - Analyst Blog

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Shares of Cadence Pharmaceuticals, Inc. ( CADX ) remained unchanged in the corresponding trading sessions following the release of fourth quarter 2013 earnings.

The company posted a net loss of 5 cents per share in the fourth quarter of 2013, wider than the Zacks Consensus Estimate of 3 cents. The loss reported in the year-ago quarter was 25 cents per share.

Cadence Pharma reported net revenues of $35.3 million, up 105.6% year over year, and surpassing the Zacks Consensus Estimate of $33.0 million.


Quarter in Detail

Product revenues of $33.3 million were up 95% from the year-ago quarter. The increase in Ofirmev sales is fueled by robust demand.

We note that Ofirmev is Cadence Pharma's proprietary intravenous formulation of acetaminophen. It is indicated to manage pain with adjunctive opioid analgesics as well as for the reduction of fever.

The exclusive rights to Ofirmev in the U.S. and Canada were acquired by Cadence Pharma from Bristol-Myers Squibb ( BMY ) in 2006. The drug is marketed by Bristol-Myers as Perfalgan in Europe and other parts of the world.

Gross margin came in at 65%, up from 58% in the year-ago quarter.

Annual Results

Revenues in 2013 came in at $112.5 million, up from $50.1 million reported in 2012 and surpassing the Zacks Consensus Estimate of $109.0 million. The company posted a net loss of 28 cents per share in 2013, in line with the Zacks Consensus Estimate. The loss reported in the year-ago quarter was 95 cents per share.

2014 Guidance

In Jan 2014, Cadence stated that it expects net product revenue from Ofirmev sales in 2014 to come between $173.0 million and $177.0 million.

Our Take

We remind investors that Dublin-based specialty pharmaceutical company Mallinckrodt plc ( MNK ) is all set to Cadence Pharma. Mallinckrodt entered into a definitive agreement with Cadence Pharma in Feb 2014 whereby the former will commence a tender offer to acquire all outstanding shares of the latter for $14.00 per share in cash or approximately $1.3 billion.

Both companies expect to close the transaction later in Mar 2014. Mallinckrodt expects the acquisition to be immediately accretive to its bottom line in fiscal 2014. The accretion to the bottom line in fiscal 2015 is expected to be more significant.

Cadence Pharma currently holds a Zacks Rank #3 (Hold) while Mallinckrodt carries a Zacks Rank #1 (Strong Buy). Right now, Shire ( SHPG ) also looks attractive with a Zacks Rank #1.



BRISTOL-MYERS (BMY): Free Stock Analysis Report

CADENCE PHARMA (CADX): Free Stock Analysis Report

MALLINCKRODT PL (MNK): Free Stock Analysis Report

SHIRE PLC-ADR (SHPG): Free Stock Analysis Report

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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: BMY , CADX , MNK , SHPG

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