So Far, So Good for Omrix
By Brian Orelli
February 7, 2008
Recommended (3)
In a surprise -- at least to me -- announcement yesterday, Omrix Biopharmaceuticals (Nasdaq: OMRI) reported its preliminary product sales for the fourth quarter. I guess it just couldn't wait until its earnings release on March 6 to share the good news.
Product sales in the fourth quarter were up 11.5% versus the year-ago quarter. That's not a mind-blowing number, but the company didn't have any Vaccinia Immunoglobulin (VIG) sales this year. Sales of VIG, which treats the side effects of smallpox vaccinations, tend to be lumpy and are basically at the whim of government biodefense contracts. Excluding the VIG sales from the year-ago quarter, sales were up a whopping 80%.
The year-over-year sales increase essentially came from its biosurgery products, which it sells through Johnson & Johnson (NYSE: JNJ). The company may have made the early revenues announcement partly to calm investors' nerves about the stiff competition that its new thrombin product, Evithrom, is getting from ZymoGenetics (Nasdaq: ZGEN) and King Pharmaceuticals (NYSE: KG).
Omrix didn't break out sales by product, so we don't know how well its thrombin is selling. At the very least, we know that sales of its fibrin sealants, Evicel and Quixil, can make up for any slow adoption of Evithrom. Evicel recently received an expanded label for use in any type of surgery, but it's possible that the strong sales in the fourth quarter were due to surgeons using the product off label.
To further assuage investors' fears, Omrix said that it expects sales of biosurgery products to increase 75% this year compared to last. With potential sales of VIG to France this year as well, 2008 looks like it could be a banner year for the biotech firm.
As for 2007, we'll have to wait and see how the bottom line shook out, but right now the Rule Breakers pick is looking good.
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