It has been about a month since the last earnings report for Horizon Therapeutics (HZNP). Shares have added about 7.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Horizon Therapeutics due for a pullback? 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 Beat Estimates, Revenues Rise Y/Y
Horizon reported fourth-quarter 2021 adjusted earnings of $1.41 per share, which beat the Zacks Consensus Estimate of $1.27. The company reported adjusted earnings of $1.17 in the year-ago quarter.
Quarterly sales of $1.01 billion rose 36% year over year and surpassed the Zacks Consensus Estimate of $996 million. Sales were up due to the high uptake of Tepezza for treating thyroid eye disease (TED). The sale of the drug has exceeded management’s expectations.
Quarter in Detail
The company reports financial results under two segments, namely Orphan (previously known as the Orphan and Rheumatology segment) and Inflammation (previously known as the primary care segment).
Sales in the Orphan segment were $940.5 million, up 50% from the prior-year figure, driven by the strong relaunch of Tepezza, as well as continued growth of drugs like Krystexxa and Ravicti, among others. The segment represented 93% of the total fourth-quarter net sales.
Krystexxa sales rose 32% year over year to $170.3 million. Tepezza generated net sales of $589.6 million in the fourth quarter, up 72% year over year. Tepezza was relaunched in the United States in April 2021 after sales were negatively impacted by a short-term supply disruption due to U.S. government-mandated COVID-19 vaccine orders, which began in December 2020.
Ravicti sales were $74.4 million in the quarter, up 6% year over year.
Procysbi sales were $47.4 million in the quarter, flat year over year.
However, net sales in the Inflammation segment were $74 million, down 37% year over year.
Adjusted research and development expenses were $115.4 million, up from $68.4 million in the year-ago quarter. Adjusted SG&A expenses were $344.9 million, up from $240.6 million in the year-ago quarter.
The company had cash, cash equivalents and investments worth $1.58 billion as of Dec 31, 2021, up from $1.07 billion as of Sep 30, 2021.
2022 Guidance
Horizon expects net sales of $3.9-$4.0 billion for 2022. The Zacks Consensus Estimate for the metric is pegged at $3.96 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Horizon Therapeutics has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 #3 (Hold). We expect an in-line return from the stock in the next few months.
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