It has been about a month since the last earnings report for Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) . Shares have lost about 7.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Sucampo Beats Q4 Earnings, 2017 View Reaffirmed
Sucampo reported adjusted earnings of $0.68 per share in the fourth quarter of 2016, beating the Zacks Consensus Estimate of $0.49 by 38.8%. Reported earnings were also up by 58.1% from the year-ago figure of $0.48.
Total revenue came in at $73 million, up 32% from the year-ago quarter, and surpassed the Zacks Consensus Estimate of $64 million, driven by the receipt of a milestone payment from Mylan (NASDAQ:MYL) of $10.0 million in the reported quarter as well as higher Amitiza sales in both North America and Japan. Sucampo has a license, commercialization and supply agreement with Mylan for marketing Amitiza in Japan.
The Quarter in Detail
Product sales were $42.3 million, up 42.8% year over year, and product royalty revenue was $26.3 million, up 14.5% year over year.
Sales of Amitiza,Sucampo's marketed product, as reported by Takeda Pharmaceutical for royalty calculation purposes, in the U.S. were $114.2 million, up 11%. Takeda holds the global marketing rights for Amitiza outside Japan and China and pays royalties to Sucampo. Total prescriptions for the product in the U.S. were down 2%.
Adjusted EBITDA were $42.8 million up 54% year over year.
In Mar 2017, Sucampo received a Paragraph IV certification notice letter for an Abbreviated New Drug Application (ANDA) submitted to the FDA by Amneal Pharmaceuticals requesting approval to market a generic version of the 8 mcg and 24 mcg Amitiza soft gelatin capsule products.
Meanwhile, the company has entered into a settlement and license agreement with generic drug maker, Dr. Reddy's which is also looking to gain FDA approval for its generic version of Amitiza.
2016 Results
For 2016, earnings came in at $1.51 per share compared with earnings of 96 cents per share in 2015. Results also beat the Zacks Consensus Estimate of $1.22.
Revenues in 2016 came in at $230.1 million, up 50% year over year and surpassed the Zacks Consensus Estimate of $221.98 million.
Developments
In Dec 2016, the company initiated the clinical development of a sprinkle formulation of Amitiza. Top line results are expected in the first quarter of 2017.
The company also plans to initiate a randomized, bioequivalence study comparing sprinkle and capsule formulations of Amitiza in adult chronic idiopathic constipation (CIC) patients. A supplemental new drug application (sNDA) for approval of the sprinkle formulation for adults is expected to be submitted in the second half of 2017.
During the quarter the company also announced that Andrew Smith, the Chief Financial Officer, will be leaving Sucampo to move back to Europe. H Peter Pfreundschuh, will become Sucampo’s new Chief Financial Officer, effective March 2017.
2017 Guidance Reaffirmed
Sucampo reaffirmed its guidance for the full year 2017. The company expects total revenue in the range of $220.0 million to $230.0 million. The Zacks Consensus Estimate for 2017 is $227.28 million.
The company expects adjusted net income in the range of $80.0 million to $90.0 million, and adjusted earnings in the range of $1.35 to $1.50.
The company forecasts adjusted EBITDA of $145.0 million to $155.0 million. Adjusted EBITDA guidance excludes stock option related costs of $6.0 million
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 18.4% due to these changes.
Sucampo Pharmaceuticals, Inc. Price and Consensus
Sucampo Pharmaceuticals, Inc. Price and Consensus | Sucampo Pharmaceuticals, Inc. Quote
VGM Scores
At this time, Sucampo's stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated also a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stocks has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable solely for value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. The stock has a Zacks Rank #5 (Strong Sell). We are looking for a below average return from the stock in the next few months.
Sucampo Pharmaceuticals, Inc. (SCMP): Free Stock Analysis Report
Original post
Zacks Investment Research