Barr Pharmaceuticals
A lackluster launch of its generic version of Merck's
The GAAP bottom line seemed fine, coming in at $0.21 per share compared to $0.11 per share a year ago. However, adjusted earnings -- which subtract charges for its acquisition of PLIVA, businesses it plans to sell off, and other random charges -- were down more than 21%.
After a lackluster first quarter, it doesn't look like Barr will be able to recover this year. It plans to launch its generic version of Bayer's birth control pill, Yasmin, in the middle of this year, now that it has successfully challenged Bayer's patent. The launch should help keep its revenue in the $2.7 billion to $2.8 billion range that it guided in February, but unfortunately that's not going to help the bottom line much. Barr lowered its earnings per share guidance for the year by about 9%. Part of that decline is due to an increase in expected research and development costs, but selling a larger percentage of lower-margin products is ultimately the culprit.
2009 may be a little better for Barr. It'll launch a generic version of Shire's ADHD medication Adderall XR next year, and it's hoping to have its patent dispute over Johnson & Johnson's
The stock has been knocked down, but the company still has some nice prospects waiting in the wings. Investors with a long-term approach should see a decent return from here.