Impax Laboratories Inc.’s (IPXL) fourth-quarter 2013 loss of 2 cents per share missed the Zacks Consensus Estimate of earnings of 7 cents. The company had reported earnings of 33 cents per share in the year-ago quarter.
Results were affected by revenues resulting from the loss of exclusivity of Zomig tablet and orally disintegrating tablet (ZMT) products. Moreover, customer credits ($19.2 million) resulting from fourth quarter pricing activities on certain generic products also affected revenues.
Total revenues for the quarter declined 28.6% from the year-ago period to $100.7 million, well below the Zacks Consensus Estimate of $118 million.
For 2013, earnings per share were 82 cents, missing the Zacks Consensus Estimate of 92 cents. Earnings were below the year-ago figure of $1.96 per share.
Total revenues for 2013 declined 12.1% from the year-ago period to $511.5 million, well below the Zacks Consensus Estimate of $519 million.
Quarterly Highlights
Global Pharmaceuticals revenues came in at $86.9 million in the fourth quarter, up 5.4% year over year. This increase was driven by sales of new generic products launched throughout 2013, partially offset by the unfavorable impact of customer credits related to higher contract pricing of generic products.
Net sales of the Impax Pharmaceuticals division came in at $13.8 million in the reported quarter, down 71.9% year over year. Performance was impacted by generic competition faced by Zomig tablets and ZMT products in the U.S.
The company intends to start selling its allotment of a specified number of bottles of authorized generic Renvela tablets from mid-Apr 2014.
Research and development expenses for the quarter decreased 22.0% to $17.6 million. Selling, general and administrative expenses decreased 12.3% to $29.3 million.
2014 Guidance
The company maintained its guidance for research and development at $82 million – $88 million. This includes generic research and development expenses of $46 million – $49 million and brand research and development expenses of $36 million – $39 million.
Impax expects patent litigation expenses in the range of $11 million – $13 million.
Selling, general and administrative expenses for 2014 are expected in the range of $115 million – $120 million.
While Impax is working with the FDA to re-file a new drug application (NDA) for Rytary (for the symptomatic treatment of Parkinson’s disease), the company plans to file for EU approval in the second half of 2014. As far as the Hayward manufacturing facility is concerned, the FDA is yet to re-inspect the facility.
Impax currently carries a Zacks Rank #3 (Hold). We expect investor focus to remain on the resolution of the Hayward manufacturing facility issues.
Some better-ranked stocks in the health care sector include Mallinckrodt plc (MNK), Actavis plc (ACT) and Dr. Reddy's Laboratories Ltd. (RDY). While Mallinckrodt carries a Zacks Rank #1 (Strong Buy), Actavis and Dr. Reddy's Labs hold a Zacks Rank #2 (Buy).
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