What happened

After a big run-up in its share price following better-than-expected earnings and guidance in November, Antares Pharma (NASDAQ:ATRS) shares are down 10% at 3:30 p.m. EDT on Thursday. The company didn't report any news, so today's drop could be a simple case of profit-taking following a nearly 40% gain since October 31.

So what

The company reported it's first quarterly operating profit in history in November, thanks to nearly triple-digit revenue growth following the launch of Xyosted -- a weekly testosterone product -- and Teva Pharmaceutical's (NYSE:TEVA) launch of a generic alternative to Mylan's EpiPen. 

A man staring at a wall covered by drawings of money bags and question marks.


Overall, revenue was up 92% year over year, to $34.3 million in the third quarter of 2019, which resulted in net income of $1 million, or $0.01 per share. Wall Street's industry watchers were expecting sales and earnings per share (EPS) to clock in at $7 million and $0.03 lower, respectively.

Xyosted sales accounted for much of the improvement in sales and profit. An alternative option to using messy gels daily, Xyosted is dosed through an auto-injector once per week. Sales of Xyosted totaled $7 million last quarter. Sales of Otrexup (a subcutaneous formulation of methotrexate) improved to $4.4 million in the quarter from $4.1 million in the same quarter one year ago. 

Revenue from Teva Pharmaceutical associated with its epinephrine product also contributed to sales significantly, lifting partnered-products revenue to $13.2 million from $7.5 million in the year-ago period. The epinephrine product also generated royalties that boosted Antares' companywide royalty revenue 126% year over year, to $8.4 million for the three months ended Sept. 30, 2019.

Now what

The sell-off may offer investors an opportunity to buy shares on sale. The company's third-quarter performance prompted management to boost its full year 2019 sales guidance to a range of between $115 million to $120 million, up from $100 million to $110 million previously.

A tight lid on expenses, an ongoing ramp up in Xyosted, and the potential for Teva Pharmaceutical's generic EpiPen to win more market share could all help Antares Pharma deliver better-than-expected results in 2020. Additionally, Antares Pharma could benefit from a potential launch of Teva Pharmaceutical's generic version of the blockbuster drug Forteo later this year if regulators cooperate, providing yet another important revenue stream.