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Horizon's (HZNP) Q3 Earnings Beat Estimates, 2021 Guidance Up

Horizon's (HZNP) earnings and revenues beat estimates in the third quarter of 2021. The company lifts net sales guidance for 2021.

This story originally appeared on Zacks

Horizon Therapeutics plc HZNP reported third-quarter 2021 adjusted earnings of $1.75 per share, which beat the Zacks Consensus Estimate of $1.54 and also increased from the year-ago quarter’s adjusted earnings of $1.74.

- Zacks

Quarterly sales of $1.04 billion surged 63% year over year and surpassed the Zacks Consensus Estimate of $980 million. Sales were up in the third quarter following the relaunch of Tepezza for treating thyroid eye disease (TED). Per the company, the relaunch of Tepezza exceeded management’s expectation, driven by rapid patient starts, strong patient demand and a higher prescriber base.

Shares of Horizon have rallied 59.1% so far this year against the industry’s decrease of 8.2%.

Zacks Investment ResearchImage Source: Zacks Investment Research

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 $951 million, up 78% from the prior-year figure, driven by the strong relaunch of Tepezza as well as continued growth of drugs like Krystexxa, Ravicti, Procysbi and Actimmune. The segment represented 92% of the total third-quarter net sales.

Krystexxa sales surged 46% year over year to $158.1 million. Tepezza generated net sales worth $616.4 million in the third quarter, up 115% 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 $76.2 million in the quarter, up 18% year over year.

Procysbi sales were $49.3 million in the quarter, up 14% year over year.

However, net sales in the Inflammation segment were $86 million, down 15% year over year.

Adjusted research and development expenses were $74.3 million, up from $27.7 million in the year-ago quarter. Adjusted SG&A expenses were $301.1 million, up from $194.4 million in the year-ago quarter.

The company had cash, cash equivalents and investments worth $1.07 billion as of Sep 30, 2021, up from $812.3 million as of Jun 30, 2021.

2021 Guidance

Horizon raised the financial guidance it provided earlier this year.

The company expects 2021 net sales between $3.16 and $3.21 billion compared with the previous expectation of $3.025-$3.125 billion. The Zacks Consensus Estimate stands at $3.13 billion.

The company expects Tepezza net sales to be greater than $1.625billion. The same was earlier expected to be more than $1.550 billion. Krystexxa net sales are expected to be above $550 million compared with the previous expectation of $500 million.

Recent Updates

In October 2021, Horizon announced positive top-line data from the phase IV MIRROR study evaluating Krystexxa plus methotrexate in patients with uncontrolled gout. The study met the primary endpoint by demonstrating a significant increase in efficacy using Krystexxa with the immunomodulator methotrexate versus the response rate of Krystexxa with placebo for people with chronic gout refractory to conventional therapies.

Horizon plans to submit a supplemental biologics license application for Krystexxa to the FDA in the first quarter of 2022.

In September 2021, Horizon enrolled the first patient in a phase IV study evaluating Tepezza for the treatment of chronic (inactive) TED, a serious and potentially vision-threatening rare autoimmune disease.

The randomized, placebo-controlled study is evaluating the safety, efficacy and tolerability of Tepezza as compared to placebo in treating patients with chronic TED. The primary efficacy endpoint of the study is to see the change from baseline in proptosis (eye bulging) in the affected eye at week 24 of treatment.

The company is also planning to initiate a phase I exploratory study later in the fourth quarter of 2021 on Tepezza for addressing diffuse cutaneous systemic sclerosis (dcSSc).

Horizon also expects to begin a pivotal phase IIb study later in the fourth quarter of 2021 on HZN-825, a lysophosphatidic acid receptor 1 (LPAR1) antagonist for treating dcSSc. Another phase IIb study on HZN-825 for treating idiopathic pulmonary fibrosis (IPF) is also expected to begin later in the December quarter of 2021.

Zacks Rank & Stocks to Consider

Horizon currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector include Agenus Inc. AGEN, Amicus Therapeutics, Inc. FOLD and Athenex, Inc. ATNX, all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agenus’ loss per share estimates have narrowed 17.8% for 2021 and 20.6% for 2022 over the past 60 days. The stock has rallied 38.4% year to date.

Amicus Therapeutics’ loss per share estimates have narrowed 1.3% for 2021 and 37.5% for 2022 over the past 60 days.

Athenex’s loss per share estimates have narrowed 9% for 2021 and 9.2% for 2022 over the past 60 days.

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