New drugs help Actavis beat profit estimates
(Reuters) - Generic drugmaker Actavis Inc (ACT.N), formerly Watson Pharmaceuticals, reported a higher-than-expected first-quarter profit after launching several new products, and raised its full-year profit forecast.
The company, the topic of takeover chatter last week, also said it was in "routine discussions" for product deals and even large-scale merger and acquisitions.
Over the weekend, Reuters reported that a proposed merger of Actavis with Canada's specialty pharmaceutical company Valeant Pharmaceuticals International Inc (VRX.TO) was put on hold as the companies failed to agree on the terms of a deal.
Actavis said it was focused on creating a global specialty pharmaceutical company and could not comment further until there was something concrete to report on.
The Canadian company was seeking to buy Actavis for $13 billion, a Reuters source had said on Saturday, a deal that would have created a combined company with a market value of $35 billion.
Actavis shares were up 2 percent to $106.60 in morning trade on the New York Stock Exchange.
The world's third-largest generic drugmaker changed its name from Watson after buying Swiss drugmaker Actavis Group in October last year as part of its strategy to expand in international markets and offer more specialty drugs.
For the first-quarter, generic drugs sales, which contributed about 80 percent to revenue, rose 37 percent to $1.53 billion, driven mainly by the takeover of the former Actavis Group in October.
Adjusted gross margins for the generic business rose to 50.7 percent from 45.1 percent a year ago, helped by a deal to distribute Lidoderm pain relieving patch and higher margins on its generic Concerta, a drug for attention deficit hyperactivity disorder.
FIRST QUARTER RESULTS
Actavis posted a net loss of $102.8 million, or 79 cents per share, for the first quarter, due to charges related to the acquisition of Actavis and Uteron Pharma. It had earned $54.8 million, or 43 cents per share, a year earlier.
Excluding one-time items, it earned $1.99 per share, above the average analyst estimate of $1.86, according to Thomson Reuters I/B/E/S.
Revenue rose 24 percent to $1.90 billion, slightly below the average analyst estimate of $1.97 billion.
New generic launches included a version of Suboxone opioid dependence drug and Zovirax herpes ointment. Actavis also sells its own branded drugs and distributes third-party products.
"We continue to see Actavis as one of the best-positioned names in our specialty pharma group, particularly with increased clarity on both near and long-term results based on a series of launches and patent settlements thus far in 2013," J.P. Morgan analyst Chris Schott said in a note.
The company plans to launch generic Pulmicort, AstraZeneca Plc's (AZN.L) big-selling asthma drug, in the second quarter.
Total branded and generic sales of Pulmicort Repsules were around $1.2 billion in the United States in the 12 months to January 2013.
Actavis on Wednesday bought the global rights to Valeant's antibiotic vaginal gel for about $55 million and said it would share its profit with Valeant if it launches an authorized generic.
The company settled several patent disputes this year with Purdue Pharma, Shire Plc (SHP.L) and AstraZeneca, enabling it to sell generic versions of some of the companies' drugs.
Actavis raised its 2013 adjusted profit forecast to $8.10-$8.50 per share from $7.70-$8.10. Analysts were expecting earnings of $8.08 per share. Actavis reiterated its full-year revenue forecast of $8.1 billion.
The company said in January it expected earnings to rise at least 30 percent in 2013, but the forecast fell short of analysts' expectations at the time.
Valeant reported a 12 percent rise in adjusted quarterly profit on Thursday, helped by higher product sales, and raised its full-year adjusted profit forecast.
(Editing by Sreejiraj Eluvangal)