A month has gone by since the last earnings report for Horizon Therapeutics (HZNP). Shares have lost about 8.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Horizon Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Horizon’s Q4 Earnings & Sales Surpass Estimates
Horizon reportedfourth-quarter 2020 adjusted earnings of $1.28 per share, which increased from the year-ago quarterly earnings of 56 cents. The earnings also beat the Zacks Consensus Estimate of $1.05 per share.
Quarterly sales of $745.3 million were up 105% year over year. The top line also beat the Zacks Consensus Estimate of $694 million. Sales were driven by the strong launch of Tepezza.
Quarter in Detail
The company reports financial results under two segments — Orphan and Rheumatology, and Inflammation (previously known as the primary care segment). Notably, first-quarter 2020 onward, the Orphan and Rheumatology segment was renamed the Orphan segment.
Sales in the Orphan segment were $628.2 million, up 151% from the prior-year figure, driven by the continued growth of drugs like Tepezza, Krystexxa, Procysbi and Actimmune. The segment represented 84% of total fourth-quarter net sales.
Krystexxa sales increased 16% year over year to $128.9 million. Tepezza generated net sales worth $343.3 million in the fourth quarter. In January 2020, the FDA approved Tepezza for the treatment of thyroid eye disease (TED).
Ravicti sales were $70.2 million in the quarter, up 3% year over year.
Fourth-quarter 2020 net sales in the Inflammation segment were $117.1 million, up 3% year over year.
Adjusted research and development expenses were $38.3 million, up from $26.5 million in the year-ago quarter. Adjusted SG&A expenses were $240.6 million, up from $161.1 million in the year-ago quarter.
2021 Guidance
The company expects 2021 net sales between $2.70 billion and $2.80 billion. The Zacks ConsensusEstimate stands at $2.74 billion. The company expects Tepezza net sales to be greater than $1.27 billion and Krystexxa net sales to be above $500 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month. The consensus estimate has shifted -22.41% due to these changes.
VGM Scores
Currently, Horizon Therapeutics has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Horizon Therapeutics has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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