Impax sales miss on drug withdrawal, fall in generics market share

Tue Oct 30, 2012 9:37am EDT

* Third-quarter adjusted profit $0.48/share vs est $0.50/share

* Third-quarter revenue $145.6 mln vs est $164.4 mln

* Generics sales fall 12 pct

* Takes $2 million charge related to drug withdrawal

Oct 30 (Reuters) - Drugmaker Impax Laboratories reported lower-than-expected third-quarter revenue as one of its drugs was withdrawn from the market and generic competition eroded its market share.

Total revenue at Impax, which has over 100 generic products, rose 21 percent to $145.6 million in the quarter, but missed analysts' expectations of $164.4 million, according to Thomson Reuters I/B/E/S.

Sales at the company's generics business fell 12 percent to $100.4 million. The Rx partner business - part of its generics revenue stream - reported a loss of $792,000 on lower sales of generic products.

Impax reported lower revenue from its hyperactivity drug Adderall, which was a money spinner for the company, as it lost market share to Swiss drugmaker Actavis' generic version that was approved in June. Actavis is being acquired by Watson Pharmaceuticals.

"Actavis had gained share slower than most expected, but most of the share had been coming out of Impax's pocket," analyst Corey Davis of Jefferies said in a note dated Oct. 25.

Ireland-based Shire, which supplies Adderall to Impax, also reported lower royalties from the drug in the third quarter, impacted by Actavis' generic version.

Impax suffered another setback earlier this month when the FDA said its generic antidepressant Budeprion XL 300 mg was not therapeutically equivalent to the original drug -- GlaxoSmithKline's Wellbutrin.

Impax stopped shipping the drug and took a $2 million charge for the voluntary withdrawal.

Two drugs in Impax's portfolio contribute significantly to its revenues -- Adderall and a generic version of Teva Pharmaceutical Industries Ltd's lipid drug, Lofibra.

Last week, the U.S. health regulator approved another version of the lipid drug by Mylan Inc. ()

Impax's third-quarter net income rose to $20 million, or 29 cents per share, from $17.2 million, or 26 cents per share, a year earlier.

Excluding items, the company earned 48 cents per share. Analysts were expecting a profit of 50 cents per share.

With patents expiring on blockbuster drugs, large generic drugmakers like Mylan and Teva are buying smaller companies to gain and retain market share.

Impax, which has a market value of $1.64 billion, has relied on drug licensing deals, such as its agreement to market AstraZeneca's migraine drug.

Shares of Hayward, California-based Impax closed at $24.34 on Friday on the Nasdaq. The exchange remained closed on Monday as the United States braced for one of the biggest storms to hit the country.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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