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What: Shares of Zogenix (ZGNX), a biopharmaceutical company focused on developing therapies to treat central nervous system disorders and pain, dipped by as much as 13% after the company reported worse than expected fourth-quarter results after the closing bell last night.
So what: For the quarter, Zogenix reported a modest increase in revenue to $9.9 million, from $9.5 million in the year-ago period. Sumavel DosePro, the company's FDA-approved rapid-acting migraine medication, provided $9 million in revenue, with service and other revenue accounting for the other $0.9 million. The company's adjusted net loss shrunk on an earnings-per-share basis to $0.13 from $0.16 due to more shares now outstanding, but actually delivered a widening in its net loss of 4% compared to this quarter last year. By comparison, Wall Street had expected a narrower quarterly loss of just $0.09 per share.
Now what: These results were pretty much par for the course as Sumavel DosePro sales growth has been unimpressive for multiple quarters now. The real allure for Zogenix comes from Zohydro ER, its severe pain therapy that was approved in October and first made available in select pharmacies this week. The Food and Drug Administration is quite fickle with severe pain med approvals, so this was a bit of a surprise that could go a long way to getting Zogenix toward profitability. If all goes well, Zogenix may be profitable by 2015, but given that its shares have vaulted higher by more than 200% since September, much of that optimism may already be baked into the share price.