Pharmacyclics Beats on Q1 Earnings, Misses Revenues - Analyst Blog

Pharmacyclics, Inc. 's PCYC first-quarter 2015 earnings of 13 cents per share surpassed the Zacks Consensus Estimate of 5 cents. However, earnings were down from the year-ago figure of 23 cents per share. Results in the quarter were hurt by higher expenses.

Pharmacyclics Inc. - Quarterly EPS | FindTheCompany

Total revenues in the first quarter of 2015 jumped to $205.8 million from $119.4 million in the year-ago quarter. However, revenues were below the Zacks Consensus Estimate of $222 million.

Pharmacyclics is getting acquired by AbbVie ABBV as per an agreement entered in March this year. The deal, valued at approximately $21 billion, is expected to close in the second quarter of 2015.

Quarterly Details

Imbruvica is Pharmacyclics' sole marketed product. The company's net product revenues in the U.S. rose to $189.2 million in the first quarter from $56.2 million in the year-ago quarter.

We remind investors that Imbruvica gained FDA approval for all lines of therapy for the treatment of patients suffering from Waldenstrom's macroglobulinemia (WM) in Jan 2015. This makes Imbruvica the first and only FDA approved treatment for this indication.

We note that this is the fourth approval for Imbruvica. Imbruvica is currently approved for the treatment of patients with mantle cell lymphoma (MCL) or chronic lymphocytic leukemia (CLL) who have received at least one previous therapy and for CLL patients with a deletion of the short arm of chromosome 17. We are encouraged by the label expansion of Imbruvica.

Meanwhile, Pharmacyclics is working on expanding Imbruvica's label further and is evaluating the drug for indications like small lymphocytic lymphoma and diffuse large B-cell lymphoma among others.

Pharmacyclics has a collaboration agreement with Janssen, a Johnson & Johnson JNJ company, for Imbruvica.

Research & development expenses were $49.4 million as compared to $35.3 million in the prior-year quarter. Selling, general & development (SG&A) expenses went up 11% to $30.7 million in the reported quarter.

Our Take

Although Pharmacyclics missed on first-quarter revenues, we are pleased with the increase in U.S. revenues. We expect Imbruvica sales to increase significantly going forward, driven by new indications in the product label and approval in new regions. We are also positive on the better-than-expected earnings report this quarter.

Pharmacyclics holds a Zacks Rank #2 (Buy). Other well-ranked stock in the health care space includes Biogen BIIB carrying a Zacks Rank #1 (Strong Buy).

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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 Nasdaq, Inc.

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

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