Shares of generic drug maker Akorn ($AKRX) shot up 14% late last week to $55.86, after the company announced on Thursday strong preliminary 2014 results and expectations of 2015 year-over-year revenue growth of 47% and earnings-per-share growth of 62%. The company partly attributed its performance--and its optimistic outlook for the future--to its October 2014 acquisition of Lloyd, which brought it 5 veterinary products and four more in the pipeline.
Raj Rai, Akorn's CEO, called 2014 a "transformative and rewarding year" for the Lake Forest, IL-based company, thanks to its acquisition program and growing pipeline. "I remain confident in the long term prospects of our business," he said in a press release.
Akorn beat analysts' estimates for the fourth quarter, reporting adjusted earnings of 50 cents a share on revenue of $227.8 million, up 257% and 168% respectively over the same quarter last year. Because of pricing competition, full-year revenues fell slightly short of analysts' estimates, coming in at $601.9 million, while EPS finished ahead of estimates at $1.16.
Akorn, which was founded as an ophthalmics company in 1971, has grown rapidly through M&A into a niche manufacturer of hard-to-make drugs, including eye medicines, nasal sprays, and inhalants. Its veterinary catalog includes prescription and over-the-counter medicines, including eye-care products, for companion and farm animals.
When asked during an earnings call with analysts to expand on Akorn's plans in animal health, Rai said the company is adding more to the pipeline, primarily injectable medicines. "We have big plans for the animal health space, both organically and inorganically," he said. "We like that business. We want to grow it."
As Akorn's stock continued its upward climb, some analysts downgraded their ratings of the company, causing shares to fall back to $53.81 by the end of the day Friday. Among the naysayers was TheStreet.com, which lauded the company's robust revenue growth but noted some concerns, including weak return on equity.