Q3 earnings: Gilead excels; Actavis floats; Lupin overcomes price controls; Allergan performs but faces headaches

The third-quarter earnings reports continue to roll in, and good news came in with the tide for Gilead ($GILD) and Lupin. The HIV giant bested analyst expectations for profit and revenue, while the Indian generics maker seems to have weathered the storm brought on by the country's price controls. Generics maker Actavis ($ACT) merely met expectations, but revised forecasts for the rest of the year made for happy shareholders, who helped the company's share price reach a highpoint. Allergan ($AGN), on the other hand, was not quite so lucky. While it posted an 18% EPS increase, uncertainty over copies of key drug Restasis has kept the company's stock floundering.

  • Gilead's flagship HIV drugs drove a 17% rise in profit, or 52 cents a share, for the third quarter, beating out analyst expectations. Older drugs Atripla and Truvada posted modest increases totaling $899.7 million and $813.7 million, respectively. Sales of newer drug Complera more than doubled to $210.7 million, and newcomer Stribild notched sales of $144 million. But Gilead may soon have a new hot seller on the scene. Last week, an FDA advisory panel voted unanimously to approve the experimental hep C therapy sofosbuvir, and the company expects final word by December. Approval could help Gilead build on revenues, which reached $2.78 billion for the quarter, a 15% increase that beat analysts' forecasts of $2.72 billion. The company also raised its top-line expectations for the year; it now predicts $10.3 billion to $10.4 billion in revenue, up from its previous range of $10 billion to $10.2 billion. Report
  • Generics maker Actavis' third-quarter results may not have exceeded expectations, but that didn't stop shares from reaching a new high. A 55% increase in profit from to $2.09 a share met analysts' expectations, but the company's stock jumped more than 5% Tuesday in mid-morning trading and continued to climb Wednesday, surpassing the $155 mark. Revised full-year 2013 and 2014 estimates that included the business of recent pickup Warner Chilcott helped drive some of that jump; Actavis said sales should total $8.6 billion for 2013, up 46%. And there may be more acquisitions on the way, Leerink Swann analyst Jason Gerberry wrote in an investor note. He predicted Actavis would "engage in additional near-term M&A," focusing on "strategic deals that will drive organic growth." ReleaseReport
  • Allergan turned in solid third-quarter results, with earnings per share up 18% to $1.23 and revenue coming in at $1.53 billion to top analyst expectations. The company also announced an agreement to sell its obesity intervention business to Apollo Endosurgery, a deal it expects to close by year's end. But as Leerink Swann analyst Seamus Fernandez pointed out in a note to investors, Allergan's "stock continues to struggle through the ophthalmology business headwinds." Its chronic dry eye treatment Restasis grossed $792 million last year, but it loses patent protection next May--and per FDA draft guidance, those copies won't have to go through clinical trials. Allergan has written the FDA to demand a higher standard for generics, but the agency hasn't announced its final decision. Therefore, Fernandez wrote, "we believe only major capital allocation moves (share repurchase; major acquisition or merger; outright sale) are likely to drive material upside in the next 6-12 months." ReleaseReport (PDF)
  • Lupin seems to be out of the sales lag it experienced last quarter when new price controls in India dragged revenues down. The Indian drugmaker put up an 18% rise in quarterly sales, which helped power a 40% profit increase over the same period last year. What's more, the company expects its Indian business to grow by 18% to 20% by the fiscal year's end in March 2014, CEO Vinita Gupta told Reuters. The domestic business accounts for a quarter of Lupin's total sales. Release (PDF) | Report

Special Reports: Top 10 Drug Patent Losses of 2014 - Restasis, Allergan | Top 10 generics makers by 2012 revenue - Actavis | Top 15 Drug Launch Superstars - Stribild - Gilead Sciences