Mallinckrodt plc (MNK) issued its financial guidance for the fiscal year 2015 ending Sep 25, 2015. The guidance includes the impact of the Questcor Pharmaceuticals acquisition that was completed in August this year.
The specialty biopharmaceutical company expects fiscal 2015 earnings in the range of $6.70 to $7.20 per share, which is way above earnings of $4.00 to $4.30 anticipated for fiscal 2014 (guidance provided with third quarter fiscal 2014 results). The Zacks Consensus Estimate for fiscal 2015 currently stands at $6.88 per share, within the guidance range.
Mallinckrodt expects net sales (excluding the impact of currency fluctuations) for fiscal 2015 in the range of $3.65–$3.75 billion. The Zacks Consensus Estimate for fiscal 2015 currently stands at $3.7 billion, which is also within the guidance range.
For fiscal 2015, net sales from the Specialty Pharmaceuticals segment are expected in the range of $2.87–$2.92 billion, which includes product sales from H.P. Acthar Gel and Ofirmev. Meanwhile, the Global Medical Imaging segment is expected to deliver net sales of $760–$800 million in fiscal 2015. The company expects capital expenditures to be between $130 million and $150 million in fiscal 2015.
Acthar Gel, which became a part of the company’s portfolio following the Questcor acquisition, is currently approved for 19 indications but marketed for only 9 indications. Mallinckrodt plans to step up commercialization efforts for Acthar in the currently approved indications including rheumatology and pulmonology as well as underserved patient populations. Mallinckrodt further intends to invest in research and development activities pertaining to Acthar.
Ofirmev is slated to be another primary growth driver in fiscal 2015. Broad formulary access, further penetration in the surgical market and an increase in vials per procedure should drive sales.
Our Take
Mallinckrodt’s guidance for fiscal 2015 looks achievable. The recently completed Questcor acquisition will lead to diversification, increased scale, revenues, profitability and cash flow. Acthar Gel should be a strong complement to Mallinckrodt’s portfolio of specialty brands like Ofirmev, Exalgo and Xartemis XR.
Mallinckrodt currently carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the health care sector include Actavis plc (ACT), Mylan, Inc. (MYL) and Ligand Pharmaceuticals Incorporated (LGND). All three carry a Zacks Rank #1 (Strong Buy).
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