Earlier in the day, King Pharmaceuticals
Many of King's lead products have been under competitive, regulatory, and legal attack for several years now. Its coagulant product Thrombin-JMI is facing competition from Omrix Biopharmaceuticals
Revenue in the second quarter was up nearly 9%, although a majority of that growth was due to the recently acquired pain drug Avinza, from Ligand Pharmaceuticals
King's bottom-line growth wasn't able to keep up with its top line; higher costs presumably associated with Avinza made sure of that. Non-GAAP earnings per share was up only two cents to $0.48 a share year over year.
When asked in the conference call about potential acquisitions (King holds more than $920 million in cash and investments), the company's management demurred on the subject, merely stating that there were products or companies under consideration. With so many of its sales potentially facing generic competition in the coming years, an acquisition is likely to come soon.
King didn't have many exciting new developments with its drug pipeline in the past few months, except that results from a phase 3 study of abuse-deterrent pain drug Remoxy are expected in the fourth quarter. If the studies are successful (and it's highly likely they will be), Remoxy could be on the market in 2009 after the company submits a marketing application, as expected, to the FDA in 2008.
The second quarter wasn't as strong as King's first quarter. Despite this slight operational downturn, King's financial outlook remains good for the rest of 2007, if it can successfully defend its Altace patents in the courts. Investors should expect more volatility in shares of King as it defends Altace from potential generic competition and waits for the Remoxy study results.
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