It has been about a month since the last earnings report for Horizon Therapeutics (HZNP). Shares have added about 38.3% 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 the most recent earnings report in order to get a better handle on the important drivers.
Horizon’s Q3 Earnings & Revenues Surpass Estimates
Horizon reported third-quarter 2022 adjusted earnings of $1.25 per share, which beat the Zacks Consensus Estimate of $1.00. The company reported adjusted earnings of $1.74 per share in the year-ago quarter.
Quarterly revenues of $925.4 million declined 11% year over year, owing to lower sales in the Inflammation segment and lower sales growth of Tepezza, which is approved for treating TED. Revenues surpassed the Zacks Consensus Estimate of $889 million.
Quarter in Detail
Horizon reports financial results under two segments, Orphan and Inflammation.
Sales in the Orphan segment were $904.7 million, down 5% from the prior-year figure, primarily due to lower sales growth in Tepezza. Other drugs like Krystexxa, Uplizna, Ravicti, Actimmune and Procysbi continued the momentum. The segment represented almost 98% of total third-quarter net sales.
Krystexxa sales rose 21% year over year to $191.6 million. Tepezza generated net sales of $490.9 million in the third quarter, which declined 20% year over year.
Ravicti sales were $84.3 million in the quarter, up 10% year over year.
Procysbi sales were $57.8 million in the quarter, up 17% year over year.
Uplizna sales were $43.8 million in the quarter, up 134% year over year.
Actimmune sales were $34.4 million in the quarter, up 15% year over year.
Meanwhile, net sales in the Inflammation segment were $20.7 million, down 76% year over year.
Adjusted research and development expenses were $108.4 million, up from $74.3 million in the year-ago quarter. Adjusted SG&A expenses were $342.8 million, up from $301.1 million in the year-ago quarter.
The company had cash, cash equivalents and investments worth $2.13 billion as of Sep 30, 2022 compared with $1.89 billion as of Jun 30, 2022.
2022 Guidance
Horizon increased its net sales guidance for the full-year 2022.
The company now expects net sales in the range of $3.59-$3.61 billion compared with the previous expectation of $3.53-$3.60 billion for 2022. The Zacks Consensus Estimate for the metric is pegged at $3.57 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Horizon Therapeutics has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, 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 B. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Horizon Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Horizon Therapeutics is part of the Zacks Medical – Biomedical and Genetics industry. Over the past month, BioMarin Pharmaceutical (BMRN), a stock from the same industry, has gained 21.4%. The company reported its results for the quarter ended September 2022 more than a month ago.
BioMarin reported revenues of $505.34 million in the last reported quarter, representing a year-over-year change of +23.6%. EPS of $0.45 for the same period compares with $0.18 a year ago.
For the current quarter, BioMarin is expected to post earnings of $0.34 per share, indicating a change of +1033.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.2% over the last 30 days.
BioMarin has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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