Now that it has finally caught up with its financial statements, after falling behind to restate earnings from 2006, investors can see how Par Pharmaceutical
Revenue rose only 6% year over year, but the bottom line made investors happy. Even with higher research and development costs, licensing a few branded drugs helped Par double its adjusted income from continuing operations. Lower administrative costs contributed to a lot of that increase, but so did selling higher-margin products. Looks like I should throw Par onto my list of companies benefiting from a shift to higher-margin products.
The bright spot for the company last year was clearly its branded-drug business, which grew revenue 72% and in-licensed three phase 3 drugs. It even added a fourth phase 3 drug -- Onconase, a potential oncology product from Alfacell
There was one sour spot for the branded business: Development of one of the products it licensed, Pafuramidine, has been discontinued. The good news is that Par lost only the $3 million up-front payment it made to Immtech, so it wasn't a huge disaster.
On the generics side, there might be a little more uncertainty. The company had some pretty big launches last year, but it's seeing pricing pressure on almost all of its products. Par plans to launch a generic version of GlaxoSmithKline's
Lumpy revenues are a fact of life in the generic-drug industry. Indeed, it looks like Par Pharmaceutical may have trouble staying at par this year.