Tag Archives: depo

Horizon Pharma Spikes On Earnings Beat; Depomed Rises On Upgrade

Specialty drugmaker Horizon Pharma ( HZNP ) jumped in trading Monday after its Q1 earnings topped Wall Street’s estimates and the company affirmed guidance, while its former buyout target Depomed ( DEPO ) was also up sharply on an upgrade. Horizon said earnings climbed 89% over the year-earlier quarter to 34 cents a share, beating analysts’ consensus by 4 cents, according to Thomson Reuters. Sales rose 81% to $204.7 million, about $7 million above estimates. Horizon affirmed its 2016 sales guidance, first issued in January, of $1.025 billion to $1.05 billion, with EBITDA of $505 million to $520 million. It did not offer EPS guidance. It said that Q2 sales should comprise 22% to 23% of the year’s revenue, and 21% to 22% of EBITDA. Horizon’s continued affirmation of 2016 guidance surprised Wall Street, after it guided to below-consensus Q1 numbers on April 12. Analyst consensus is still below Horizon’s guidance, with $1 billion in sales and $482 million in EBITDA. “Although there remains a high degree of skepticism by some about the quarterly progression necessary to meet these targets, we would note that the Q1 performance — and Q2 guidance (which is for revenues to reach 22-23% of the full year versus 23% for 2015 and 22% for 2014) — are very much in line with the standard seasonality,” wrote Cowen analyst Ken Cacciatore in a research note. Horizon stock was up 14% in afternoon trading on the stock market today , near 15. Though possessing a solid EPS Rank of 79, the stock has lost half its value since last July as various parties have accused it of predatory pricing practices. One such party was Depomed, which Horizon tried unsuccessfully to buy last year. Depomed’s management is now under siege from activist investor Jeffrey Smith, largely because of its unwillingness to be bought. It didn’t help Depomed’s management that last week the company missed its Q1 expectations while raising its expense guidance, erasing the stock’s gains from Smith’s involvement. However, on Monday Mizuho Securities upgraded it to buy from neutral and added a buck to its price target, now 19. “We think there is now an attractive entry point into a stock with some positive momentum and takeout prospects ahead,” wrote Mizuho analyst Irina Koffler in her research note. Depomed stock was up nearly 16% in afternoon trading Monday.

After Hours: Apple App Store Changes, Valeant Mulls Options, BATS IPO

Apple ( AAPL ) has formed a secret team to mull changes to its App Store, including a paid search feature in which app developers would pay to have their apps displayed at the top of results, Bloomberg reported , citing sources. Apple already takes a 30% cut from app purchases bought via App Store. BATS Global Markets ( BATS ) priced its initial public offering of 13.3 million shares, raising $252.7 million. The expected range was 17-19. The stock exchange, which attempted to go public in a 2012 fiasco, will trade as BATS starting Friday. Valeant Pharmaceuticals ( VRX ) has hired investment banks to review its options amid interest from buyout firms and others for some assets, Reuters reported , citing sources. It’s further evidence that Valeant may need to sell significant assets to cover its heavy debt load. Shares rose 2% in late trading. Depomed ( DEPO ) scrapped plans to reincorporate in Delaware after Starboard Value launched a proxy fight to replace its board, in part to stop that move. Delaware gives companies more power to block shareholder activism. The drugmaker’s stock rose 2% late.

‘Egregious’ Depomed Soars After Activist Starboard Targets Drugmaker

Shares of specialty drugmaker Depomed ( DEPO ) jumped Friday after an activist investor took a stake in the company and challenged the management. Starboard Value LP, which has led high-profile efforts to shake up Darden Restaurants ( DRI ) and Yahoo ( YHOO ), announced that it had acquired a 9.8% stake in Depomed and sent a scathing letter to the company’s CEO, James Schoeneck, and the board of directors. “Specifically, we have significant concerns regarding serious corporate governance deficiencies, questionable capital allocation decisions, and egregious actions taken by the board to stymie strategic interest in acquiring Depomed,” wrote Starboard member Jeffrey Smith in the letter. The last item referred to the board’s poison-pill provision adopted last year when Horizon Pharma ( HZNP ) attempted a hostile takeover, which was ultimately foiled . That seemed to be at the root of Starboard’s complaint, and Smith charged that Depomed’s board is making further moves to limit shareholder power. Smith cited a proposal to reincorporate Depomed, currently headquartered in Newark, Calif., in the state of Delaware, mentioned in the recent  notice of the annual shareholder meeting to be held May 18. “Upon further review, we identified unconventional provisions that indicate management and the board are using the reincorporation proposal as a tactic to further entrench themselves by suppressing shareholder rights that currently exist under Depomed-California,” Smith wrote. Starboard filed a Record Date Request Notice asking to call a special shareholder meeting. Depomed issued a brief response saying that the company “welcomes open communications with its shareholders” but that it hadn’t received any communication from Starboard before the letter. It urged shareholders to take no action. The moved came three days after Smith resigned as chairman of Darden Restaurants, a position he gained in 2014 after leading a similar, successful fight to replace Darden’s board. Starboard is also currently attempting to replace the board of Yahoo. Depomed stock shot up more than 12% in morning trade on the stock market today , near 17. The stock had been trading for less than half its 52-week high — 33.74 back on July 21 — an unusually big drop, even by drug stock standards. Yahoo stock rose fractionally intraday, while Darden Restaurants was little changed.