What happened?
A fatter portfolio means better results. At least, that's the case with Ireland-based biotech conglomerate Horizon Pharma (HZNP), which today lifted its sales and profitability guidance for fiscal 2016. The company now believes it will post a top line of $1.03 billion to $1.05 billion for the year, with adjusted EBITDA coming in at $505 million to $520 million. Those projections were up notably from the previous forecasts of $950 million to $975 million and $460 million to $475 million, respectively. The adjustments come just ahead of the expected closing of Horizon Pharma's acquisition of privately held Crealta Holdings, an all-cash $510 million deal that was announced last month.
Does it matter?
The past few months have been challenging for Horizon Pharma. Late last year, its share price was badly affected by the Turing Pharmaceuticals controversy. Not only did this put orphan-drug distributors like Horizon Pharma in a very bad light, but it raised concerns that regulators would clamp down on their pricing practices.
But that tended to overshadow Horizon Pharma's fundamental performance, which has lately been very good thanks in no small part to its well-selected portfolio of orphan drugs. The Crealta Holdings acquisition adds another treatment to that lineup, namely gout drug Krystexxa. "As with all of our orphan medicines," Horizon Pharma wrote in the original press release announcing the purchase, "we plan to maximize additional development opportunities of Krystexxa."
It's done so -- and effectively -- with its other acquisitions, so we can believe the company when it makes such a pronouncement. Horizon Pharma's raised guidance, then, is quite encouraging news, and we shouldn't be surprised to see it meet or exceed those enhanced figures.
