Horizon (HZNP) Missed Q2 Earnings Estimates, Y/Y Revenue Boost – Aug 3, 2022

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Horizon Therapeutics plc (HZNP Free Report) reported adjusted earnings of $1.07 per share in the second quarter of 2022, which missed Zacks’ consensus estimate of $1.34. The company reported adjusted earnings of $1.45 per share in the year-ago quarter.

Quarterly revenue of $876.4 million increased 5% year-over-year, driven by sales growth in the orphan segment, particularly strong growth in Krystexxa, which is approved for the treatment of uncontrolled gout. Sales, however, missed Zacks’ consensus estimate of $936 million.

Shares of Horizon dipped in premarket trading on Wednesday on weaker-than-expected earnings results. The stock is down 23.7% so far this year, compared to the industry’s 22.6% decline.

Image source: Zacks Investment Research

Quarter in detail

Horizon reports its financial results in two segments, namely Orphan (formerly known as the Orphans and Rheumatology segment) and Inflammation (formerly known as the Primary Care segment).

Orphan segment sales were $841.3 million, up 13% from the prior year, driven by strong sales growth of Krystexxa, as well as continued growth in drugs like Uplizna, Ravicti, Actimmune and Tepezza. The segment accounted for approximately 96% of total second quarter net sales.

Krystexxa sales increased 29% year over year to $167.8 million. Tepezza generated net sales of $479.8 million in the second quarter, up 6% year-over-year. Tepezza, which is approved for the treatment of thyroid eye disease, was relaunched in the United States in April 2021 after sales were negatively impacted by a short-term supply disruption due to COVID-19 vaccine orders. mandated by the US government.

Ravicti’s sales were $75.7 million in the quarter, up 11% year-over-year.

Procysbi sales were $47.7 million in the quarter, down 4% year-over-year.

Uplizna’s sales were $38.6 million in the quarter, up 167% year-over-year.

Actimmune sales were $30 million in the quarter, up 8% year-over-year.

However, Inflammation segment net sales were $35.1 million, down 59% year-over-year.

Adjusted research and development expenses were $95.4 million, compared to $127.5 million in the prior year quarter. Adjusted SG&A expenses were $352.3 million, compared to $281 million in the prior year quarter.

The company had cash, cash equivalents and investments worth $1.89 billion as of June 30, 2022, compared to $1.64 billion as of March 31, 2022.

Orientation 2022

Horizon has lowered its full-year 2022 net sales guidance.

The company now expects net sales of between $3.53 billion and $3.60 billion, compared to $3.9 billion to $4.0 billion for 2022. Zacks’ consensus estimate for the metric is set at $3.97 billion. This may have hurt investor sentiment and also caused the stock to drop in trading ahead of Wednesday’s market.

For 2022, percentage growth in Tepezza net sales is now expected in the teens, compared to the previous expectation of percentage growth in their mid-30s.

Recent updates

Last month, the FDA approved Horizon’s Supplemental Biologics License Application (“BLA”) for the combination use of Krystexxa. The FDA has approved Krystexxa plus methotrexate injection to help more people with uncontrolled gout achieve a full response to treatment.

Krystexxa, until now, was approved as monotherapy for the treatment of adult patients with chronic gout refractory to conventional therapies, also called uncontrolled gout.

In March 2022, the FDA granted priority review to the aforementioned sBLA for Krystexxa.

Zacks Ranking and Stocks to Consider

Horizon is currently wearing a Zacks rank #4 (sell).

Top-ranked stocks in the biotech sector include Therapeutic Beam Inc. (SHINE free report), Atara Biotherapeutics, Inc. (ATRA free report) and Precision BioSciences, Inc. (DTIL Free Report), all carrying a Zacks Rank #2 (Buy) at present. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Beam Therapeutics’ per-share loss estimates have declined 0.7% for 2022 and 0.8% for 2023 over the past 60 days.

Beam Therapeutics earnings beat estimates in three of the last four quarters and missed the remaining opportunity. BEAM generated an earnings surprise of 1.80% on average.

Atara Biotherapeutics’ per-share loss estimates declined 0.6% for 2022 and 13.3% for 2023 over the past 60 days.

Atara Biotherapeutics’ earnings beat estimates in two of the last four quarters and missed the same on the other two occasions. ATRA delivered a profit surprise of -12.51%, on average.

Precision BioSciences’ per-share loss estimates have declined 5.8% for 2022 and 16.2% for 2023 over the past 60 days.

Precision BioSciences’ earnings have exceeded estimates in each of the past four quarters. DTIL delivered a surprise profit of 76.15% on average.

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