Par Pharmaceutical Companies Inc. (:PRX) posted first quarter 2012 adjusted earnings of 80 cents per share, well above the Zacks Consensus Estimate of 73 cents. The year-ago earnings was 96 cents per share.
On a sequential basis, earnings climbed 2.6% during the first quarter.
Quarterly revenues of $271.5 million surpassed the Zacks Consensus Estimate of $238 million and the year-ago revenues of $233.0 million. Increase in units of the top generic products of the company led to the rise in net revenues in the reported quarter. On a sequential basis, first quarter 2012 revenues climbed 7.0%.
Revenues in Detail
Sales of Par Pharma’s generic version of AstraZeneca’s (AZN) hypertension treatment, Toprol XL (metoprolol), increased 9.6% sequentially to $61.8 million. Revenues benefited from customer buying patterns.
Sales of some of Par Pharma’s other generic drugs also increased, including budesonide (up 14.8% sequentially to $38.0 million), propafenone hydrochloride (up 16.5% sequentially to $19.1 million) and sumatriptan (up 9.2% sequentially to $16.7 million).
However, sales of some other generic drugs including fentanyl citrate lozenges (down 23.1% sequentially to $2.0 million) went down due to customer buying patterns.
Bupropion hydrochloride ER and zolpidem tartrate, both of which were added to Par Pharma’s portfolio following its acquisition of Anchen Pharmaceuticals, posted first quarter sales of $11.4 million and $6.4 million, respectively.
Sales of Par Pharma’s branded products, Megace ES and Nascobal B12 Nasal Spray, decreased 22.8% and 10.6%, respectively, on a sequential basis. While Megace ES revenues of $12.2 million were impacted by customer buying patterns, Nascobal B12 Nasal Spray revenues of $5.9 million were affected by lower prescription volume.
Other Details
Gross margin remained flat on a sequential basis at 40.8%.
R&D expenses increased to $29.9 million, from $18.1 million in the fourth quarter of 2011. The primary reason for the increase was a one-time upfront payment as well as the inclusion of R&D expenses following the acquisition of Anchen (for full quarter) and Edict Pharmaceuticals (for partial quarter).
On the other hand, first quarter 2012 SG&A expenses went down to $42.2 million from $44.5 million in the fourth quarter of 2011, mainly due to lower transaction-related costs.
Outlook
Par Pharma expects 10 to 14 product launches and 13-17 ANDA filings throughout the year.
Our View
Currently, we have an Outperform recommendation on Par Pharma, which carries a Zacks #1 Rank (short-term Buy rating).We are impressed by Par Pharma’s generic business and the recent generic product launches and approvals.
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