Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares in Akorn, Inc (NASDAQ:AKRX) spiked higher by more than 12% today after reporting fourth quarter and full year financial results.
So what: Analysts were expecting that the specialty generics ophthalmologic drugmaker would report sales of $218.8 million and EPS of $0.45 for the fourth quarter.
Instead, the company reported sales of $227.8 million, up 168% from a year ago and notched its fourth consecutive EPS beat by earning an adjusted $0.50 per share during the quarter, up 257% from 2013.
The fourth quarter performance led to full year sales of $601.9 million and adjusted EPS of $1.16.
The company's growth was driven by its acquisition of Hi-Tech Pharmacel and VersaPharm, as well as the approval of 14 unique products that will compete for a share of $850 million in annual product sales. Last year, Akorn launched 5 of those products, and this year, it plans to roll-out the rest.
As a result, Akorn expects revenue and earnings to grow significantly again in 2015. The company is guiding for sales of between $960 million and $980 million this year, up 47% from 2014, and for EPS of between $1.88 and $1.98 this year, up at least 62% from last year.
Now what: Akorn's generic product pipeline includes 87 ANDAs that are filed with the FDA and that could eventually compete for roughly $8.4 billion in annual market sales.
The company also plans to file 9 more ANDAs that represent market sales of $684 million this year. Since the company's solid pipeline suggests that it could continue to deliver sustainable growth (its sales have grown by a compounded 65% per year since 2010), I think that this is a company that investors should keep a close eye on.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.