Aegerion (AEGR) Reports Narrower-than-Expected Loss In Q3

Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) reported a loss of 46 cents per share in the second quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of 67 cents. The company had reported earnings of 7 cents in the year-ago period.

Quarterly revenues came in at $35.4 million, down 47.4% year over year. Revenues were, however, above the Zacks Consensus Estimate of $27 million.

Quarter in Detail

Net sales of Juxtapid declined 62.6% year over year to $22 million (including $18.6 million from prescriptions written in the U.S.) due to a reduction in patients on therapy as a result of the introduction of PCSK9 inhibitors in the region in the third quarter of 2015. This was, however, partially offset by higher international revenues.

As of Sep 30, 2016, there were around 393 active commercial patients being treated with Juxtapid (including approximately 260 U.S. patients), down from 423 patients at the end of the previous quarter. In Sep 2016, Aegerion received Japanese approval for Juxtapid for the treatment of homozygous familial hypercholesterolemia (HoFH).

Myalept sales amounted to $13.4 million, up 57.6% driven by an increase in the number of patients on therapy as well as a significant shipment to Japan.

As of Sep 30, 2016, the company had 125 active generalized lipodystrophy (GL) patients on commercial therapy in the U.S., including approximately 101 U.S. patients.

Research and development (R&D) expenses were of $9.9 million, down 12.4% due to lower salary and employee-related costs, and contract manufacturing costs.

Selling, general and administrative (SG&A) expenses decreased 36.7% to $27.8 million mainly due to lower salary and employee-related costs, and lower stock-based compensation related to a reduction in headcount in both the selling and administrative functions as part of the force reduction undertaken in February and July, and lower legal fees.

2016 Outlook

Aegerion has reiterated its guidance for 2016. The company continues to expect total sales in the range of $130–$150 million with Juxtapid bringing in $90–$100 million.

Myalept sales are still anticipated in the $40–$50 million band. Sales of Myalept in the ex-U.S. market are expected to be volatile on a quarterly basis due to ordering patterns.

For the fourth quarter of 2016, the company expects operating expenses to decrease.

Our Take

Aegerion’s third-quarter results were encouraging, with the company reporting a narrower-than-expected loss and revenues surpassing expectations. However, the launch of PCSK9 inhibitors in the U.S. market hurt Juxtapid sales and will continue to do so in the forthcoming quarters.

We expect investor focus to remain on the pending merger agreement with QLT Inc., (QLTI), which is expected to close this quarter.

Zacks Rank & Key Picks

Aegerion currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the healthcare sector include Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) , Geron Corporation (NASDAQ:GERN) and Exelixis, Inc. (NASDAQ:EXEL) . Both Infinity and Exelixis sport a Zacks Rank #1 (Strong Buy), while Geron carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Infinity’s loss estimates narrowed from $3.84 to $3.79 for 2016 but remained unchanged for 2017 over the last 60 days. The company has posted a positive surprise in all of the four trailing quarters with an average beat of 67.62%.

Exelixis’ loss estimates narrowed from 71 cents to 61 cents for 2016 and from a loss of 16 cents to earnings of 4 cents for 2017 over the last 60 days. The company has posted a positive surprise twice in the four trailing quarters with an average beat of 9.1%.

Geron has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 20.78%.

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