Does Horizon Pharma Inc (NASDAQ:HZNP) Provide Long-Term Growth?

by Paul Wilson | Wednesday, Mar 19, 2014 | 966 views

Boston, MA, 03/19/2014 – Shares of Horizon Pharma Inc (NASDAQ:HZNP) moves significantly in last 12 months. The move was due to increased sales volume of its flagship brand and anticipates further growth in coming periods. The stock is also trading at a wide range with 52 week low price of $2.11 and 52 week high price of $14.75. Company bit analysts’ expectation in revenue growth, however, volume expansion is unable to pay-off company’s earnings estimate in recent quarters.  Going forward, the stock will continue to move up due to the following factors.

Factor 1: Exceptional performance

Company reported a significant growth in revenues in FY2013. Net sales were $74.0 million compared to $18.8 million in prior year. The growth is primarily driven by increasing sales of Duexis by 473% to $59.0 million from $10.3 million. Horizon Pharma Inc (NASDAQ:HZNP) has improved its earnings in FY2013 with adjusted net loss (non-GAAP) of $50.4 million, or $0.79 per share, compared to net loss of $76.0 million, or $1.96 per share in prior year. Company has sufficient funds to carry out its operation. As of December 31, 2013, company’s cash balance was $80.5 million.

Factor 2: Flagship products

Duexis is mainly used to treat rheumatoid arthritis (RA) and osteoarthritis (OA).  It is a combined therapy as pain-killer alone does not have substantial improvement in patients. DataMonitor estimates that RA affects about 1.8 million people in the U.S. There is no specific cause for the disease unlike OA which usually happened due to aging. Therefore, it becomes difficult for the physicians to give pain-killer alone as it provides temporary relive with a range of side effects.

During 4Q2013, Horizon Pharma Inc (NASDAQ:HZNP) improves its product portfolio by acquiring Vimovo from AstraZeneca. The product is also used to treat arthritis.

Factor 3: Increasing market opportunity

GBI Research estimates that the global arthritic market expects to grow at a CAGR of 7.2% for the period of 2010-2018 to reach $38 billion. Of which, RA will represent nearly 68% of the overall market and expected to increase at CAGR of 8.5% to reach $27 billion by 2018. So, Horizon Pharma Inc (NASDAQ:HZNP) has wide market opportunity for Duexis. And, the addition of Vimovo will further enhance the company performance in the long-term.

Like it? Share it!

Leave A Response