Mallinckrodt Beats Q1 Earnings, Ups View - Analyst Blog
February 10 2014 - 10:35AM
Zacks
Mallinckrodt plc’s (MNK) shares have been
inching up (1.2% over two trading sessions) following the company’s
first quarter fiscal 2014 (ending Dec 2013) earnings report.
Mallinckrodt reported adjusted earnings of 88 cents per share,
beating the Zacks Consensus Estimate of 67 cents. Earnings were
above the year-ago figure of 65 cents per share.
Net sales for the quarter were $540.2 million, up 7.2% from the
year-ago quarter. Revenues were in line with the Zacks Consensus
Estimate. Revenues were mainly driven by the performance of sales
from the Specialty Pharmaceuticals segment.
Quarter in Details
Mallinckrodt reports revenues under two segments, Specialty
Pharmaceuticals and Global Medical Imaging.
Sales from the Specialty Pharmaceuticals segment were $309.5
million in the reported quarter, up 18.9%. This segment comprises
of two sub-segments, Brands and Generics and Active Pharmaceutical
Ingredients (API). Net sales in Brands were $59.6 million, up
27.9%, mainly driven by Exalgo ($36.2 million). Net sales in
Generics and API were $249.9 million, up 16.9%. This was driven by
net sales of methylphenidate HCl extended-release tablets ($56.3
million). The company upped its fiscal 2014 guidance for
methylphenidate HCl extended-release tablets to at least $150
million (old guidance: at least $120 million).
Net Specialty Pharmaceuticals sales are now expected in the range
of $1.3 billion to $1.35 billion, up from the earlier guidance of
$1.22 billion to $1.27 billion.
Sales from the Global Medical Imaging segment were $218.6 million
in the reported quarter, down 4.8%. This segment includes Contrast
Media and Delivery Systems (CMDS) as well as Nuclear Imaging sub
segments. Net sales in CMDS were $111.6 million, down 8% due to
pricing pressures. Net sales in the Nuclear Imaging segment were
$107.0 million, down 1.2% due to rising costs and supply chain
challenges.
Net Global Medical Imaging segment sales are now expected in the
range of $850 million to $900 million, down from the earlier
guidance of $885 million to $930 million.
In the first quarter fiscal 2014, research and development
(R&D) expenses were $39.0 million, up 1.6% from the year-ago
quarter.
Selling, general and administrative (SG&A) expenses remained
flat at $146.2 million. Reduction in expenses through restructuring
was offset by increased administrative costs.
Last month, Mallinckrodt’s pain candidate, PENNSAID 2%, received
FDA approval for the treatment of osteoarthritis-related pain of
the knee. The company will launch the drug this week.
Pipeline Update
Mallinckrodt has several late-stage candidates in its pipeline.
Xartemis XR, is under FDA review for the treatment of moderate to
severe acute pain. A decision is expected by the end of this month.
MNK-155 has completed a phase III study for moderate-to-moderately
severe acute pain. A New Drug Application (NDA) application will be
filed in expected in the second half of fiscal 2014.
Ups 2014 Outlook
Mallinckrodt increased its guidance for fiscal 2014. The company
expects net sales in the range of $2.2 billion - $2.3 billion in
fiscal 2014, up from the earlier guidance of R2.15 billion - $2.25
billion. The Zacks Consensus Estimate currently stands at $2.19
billion.
Adjusted earnings per share are expected in the range of $2.65
to $2.95 per share, up from the previous guidance range of $2.45 -
$2.65 per share. The Zacks Consensus Estimate currently stands at
$2.86 per share.
Mallinckrodt carries a Zacks Rank #2 (Buy). Some equally attractive
stocks include Actavis plc (ACT) and
AcelRx Pharmaceuticals, Inc. (ACRX). Meanwhile, a
better ranked stock in the generics sector is Dr. Reddy's
Laboratories Ltd. (RDY) with a Zacks Rank #1 (Strong
Buy).
ACELRX PHARMACT (ACRX): Free Stock Analysis Report
ACTAVIS PLC (ACT): Free Stock Analysis Report
MALLINCKRODT PL (MNK): Free Stock Analysis Report
DOCTOR REDDYS (RDY): Free Stock Analysis Report
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