Horizon Pharma shares crash as losses almost double in first quarter

Shares in Horizon Pharma Plc (NASDAQ:HZNP) fell by a third on Monday after the Ireland-based biopharmaceutical group saw losses more than double in the first quarter.

The group posted a net loss of US$90.6mln, or a loss of 56 cents a share, in the three months to end March. That’s wider than the US$45.4mln, or loss of 28 cents a share, it recorded for the same period a year earlier.

Adjusted earnings per share also missed analyst expectations, coming in at 21 cents a share. The Street consensus was for a reported earnings per share of 25 cents.

Sales in the three months rose to US$220.9mln from US$204.7mln, although that was, again, shy of forecasts, with Wall Street expecting a figure closer to US$248mln.

Much of the weak performance was attributable to Horizon’s primary care business, although this was partially offset by strong sales of its Krystexxa and Ravicti medicines which increased by 96% and 18% respectively.

Full-year guidance lowered

The below expectations performance from the primary care unit prompted the company to lower its overall outlook for 2017.

It now expects net sales to be in the range of US$1bn and US$1.035bn, down from its prior forecast of between US$1.24bn and US$1.29bn.

Adjusted underlying earnings (EBITDA) were also revised lower, with Horizon now forecasting them to be in the range of US$315mln and US$315ml whereas it had previously targeted between US$525mln and US$575mln.

“We generated strong first-quarter performance in our orphan and rheumatology business units, with KRYSTEXXA and RAVICTI achieving record net sales; however, our primary care business unit performed well below our expectations,” said chief executive Timothy Walbert.

“The lower primary care business unit results were related to the implementation of the contracting model with pharmacy benefit managers, which has not performed in accordance with our expectations.”

Acquisition of River Vision

In a separate announcement on Monday, Horizon told investors it is buying River Vision Development Corp for US$145mln in upfront payments.

River Vision owns Teprotumumab, a treatment for a rare eye disease which is in late-stage development.

Shares plummeted 32% to US$10.72.

Story by ProactiveInvestors