Horizon Pharma (HZNP) Lowers FY16 adj-EBITDA Guidance on Higher Expenses

October 11, 2016 8:14 AM EDT
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Horizon Pharma (NASDAQ: HZNP) disclosed that it sees 2016 adjusted EBITDA in the range of $450 to $460 million (prior range was $495 to $510 million). The revised guidance range for adjusted EBITDA reflects anticipated higher operating expenses primarily related to the following future growth opportunities:

• Additional investment to expand the Company’s managed care organization to account for a broader contracting strategy with pharmacy benefit managers (PBMs) and payers, including the addition of national and regional account managers expected to provide long-term durability to the Company’s primary care medicines DUEXIS®, VIMOVO® and PENNSAID® 2%. The Company has secured formulary status with two PBMs that represent approximately 35 percent of covered lives in the U.S. and is in discussions and negotiations with other PBMs and payers with the goal of further increasing access to its medicines.

• Additional investment in marketing, medical education and commercial infrastructure to support long-term growth of KRYSTEXXA®, including new patient access managers to focus on account support of additional KRYSTEXXA treatment sites. KRYSTEXXA benefit investigations continue to increase, which are a leading indicator of new patient starts.

• Additional investment in clinical development, regulatory and commercial functions for a potential launch of ACTIMMUNE® for Friedreich’s ataxia (FA). The Company expects to have top-line results from the ACTIMMUNE FA Phase 3 clinical trial (STEADFAST) in late December 2016.

The Company estimates, on a GAAP basis including the previously announced $65 million settlement with Express Scripts as a one-time reduction in GAAP net sales, its third-quarter 2016 net sales were in the range of $207 to $209 million. The Company estimates that non-GAAP adjusted net sales, which exclude the $65 million settlement with Express Scripts, were in the range of $272 to $274 million. The exclusion of the $65 million settlement from GAAP net sales is the only adjustment reflected in third-quarter non-GAAP adjusted net sales.

The Company expects that third-quarter 2016 adjusted EBITDA will be in the range of $139 to $141 million, which would represent an adjusted EBITDA margin of approximately 51 percent and sequential quarterly growth versus the second quarter of 2016 of approximately 15 percent.

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