Home » Drugs » Fosamax »

Barr shares fall on 3Q results

Nov 12, 2007 | Associated Press | Business Week Online

Shares of generic drug developer Barr Pharmaceuticals Inc. fell Thursday after the company said its third-quarter profit dropped 26 percent on charges and warned its fourth-quarter profit could miss Wall Street expectations.

The stock fell $2.78, or 4.9 percent, to $53.90 Thursday. Shares have traded between $45.41 and $58.38 over the last 52 weeks.

The company said special charges for the buyout of Croatian drug maker Pliva resulted in a 26 percent drop in third-quarter profit. Also, Barr expects fourth-quarter profit between 73 cents and 83 cents per share, with the mid-point of guidance falling well below Wall Street expectations of 83 cents per share.

However, the company forecast full-year profit above consensus estimates.

Citigroup Andrew Swanson reaffirmed a "Hold" rating with a $56 price target, citing the results.

"Although, adjusted earnings per share met the consensus view, we expect the shares to trade off modestly given the mixed results and the significant outperformance seen of late," he wrote in a note to investors.

Cowen and Co. analyst Ken Cacciatore reaffirmed a "Neutral" rating. He said Wall Street is more likely to focus on how the company's incorporation of Pliva turns out and the possibility for exclusive drug launches or settlements in the next 12 or 18 months.

"Barr's exclusive opportunities are fairly well known and therefore we would assume their value is already being captured in the current price," he wrote in a note to investors. "The key 2008 launch should be shared exclusivity on the Fosamax 70-milligram dose," he said.

He expects generic Fosamax revenue of $150 million in 2008. Other potential launches include generic versions of Allegra D, Ortho-Tricyclen Lo and Yasmin.