Why Impax Laboratories' Shares Soared
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 of specialty pharmaceutical company Impax Laboratories (NAS: IPXL) were climbing higher today, gaining as much as 11% in intraday trading after the company reported second-quarter results.
So what: It was a big quarter for Zomig, the migraine treatment that Impax licenses from AstraZeneca (NYS: AZN) . Zomig helped push the company's Impax Pharmaceuticals division to a profit and aided in the company's big jump in non-GAAP earnings -- from $0.19 per share last year to $0.60 this year. The bulk of the company's earnings did, however, still come from its Global Pharmaceuticals division. That segment benefitted from higher sales of its generic version of Adderall. Total company revenue increased from $126 million last year to $166 million.
The results topped Wall Street analysts' estimates on both the top and the bottom line. On average, analysts had expected $0.45 in per-share earnings on $162 million in sales.
Now what: As CEO Larry Hsu pointed out, the company currently has 46 generic drugs and 40 "internally developed or partnered products" in the works, so there's a lot going on at Impax for investors to potentially look forward to. As far as the financial results for the current year, though, the company's outlook remained relatively the same as what it delivered last quarter. The only tweak that it made to the full-year outlook was to update its potential patent-litigation spending from a flat $10 million expectation to a range of $10 million to $13 million.
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