Pharmacyclics, Inc. (NASDAQ: PCYC), a Sunnyvale-based clinical stage biopharmaceutical company focused on developing innovative oncology and immune-mediated diseases drugs, announced Thursday its financial results for the fourth quarter and fiscal year ended Dec. 31, 2013.
The company’s strong earnings were as expected, given the promising developments since the third quarter, including the FDA’s approval of its drug, Imbruvica, for treatment of those with mantle cell lymphoma, and the FDA’s granting Imbruvica with three Therapy Designation status – a first for any oncology drug.
Pharmacyclics reported a net income of $64.2 million, or 82 cents per diluted share for the fourth quarter, which surpasses the $41.9 million, or 56 cents per diluted share, for the same period a year ago.
The earnings per diluted share beat out analysts’ prevailing estimate of 68 cents, a surprise of 120.6 percent, repeating the previous year’s performance, in which the earnings per diluted share outperformed expectations by 133 percent.
Contributing to this increase in total revenue was six weeks’ worth of Imbruvica sales following the drug’s first FDA approval on Nov. 13, 2013. Chief Executive Officer Robert Duggan said he considers that first approval to be “a major corporate milestone for Pharmacyclics, and allowed us to establish ourselves as a commercial corporation.”
In the time between the November approval and fourth quarter end on Dec. 31, 2013, Imbruvica’s sales revenue amounted to $13.6 million.
In response to Imbruvica’s total sales revenue thus far, analyst Katherine Xu of William Blair & Co. stated, “We had expected Imbruvica sales revenue to amount to $6.4 million, and Wall Street had expected only $4 million in sales, so the actual number of $13.6 million is a pleasant surprise.”
Analyst Gregory Wade of Wedbush Securities expressed a similar sentiment, stating, “Before the earnings release, we expected that Imbruvica sales revenue would be $4.9 million. It surpassed our expectations.”
The increase in earnings is the result of not only the FDA’s approvals regarding Imbruvica, and subsequent sales, but earnings were also boosted by Pharmacyclics’ license agreement with Janssen Biotech, Inc. In the last quarter of 2013, Janssen Biotech provided Pharmacyclics with $110 million in milestone payments.
Total revenue rose by 113 percent, reported at $123.6 million, compared to 2012’s fourth quarter total revenue of $58 million.
Given the promising results of the last quarter of 2013, and the most recent clinical developments since, Chief Financial Officer Manmeet Soni was optimistic about 2014, remarking, “We are enthusiastic for the earnings results from the first quarter of 2014, and beyond.”
Analysts echoed that enthusiasm.
“We think Imbruvica will become the biggest drug in oncology,” Xu said. “It’s the first and best in the new wave of blood cancer treatment, and based on the drug profile and analysis of the competitive landscape, we expect peak sales of around $9 billion annually in 15 years from now.”
At the close of trading, Pharmacyclics shares gained $8.93, or 6.26 percent, to close at $151.61.
Shares fluctuated slightly during after-hours trading, reaching a high of $151.98.