The U.S.-based biopharmaceutical company, Anacor Pharmaceuticals (ANAC, Financial), reported its fourth quarter earnings for the fiscal year 2014 and the splendid set of numbers left analysts and investors impressed as the company reported top and bottom lines which clearly exceeded the Street expectations. Analysts have provided a better rating to the pharmaceutical stock based on its earnings, which were an upbeat set of numbers announced by the management on March 12. Soon after the earnings release, the shares of the company surged about 14.72% and there was an unusual increase by a whopping 117% in the trading volume of the stock on March 13, the day after the earnings release. Let’s dig in further to decipher the major highlights of the final quarter and what analysts are speculating on the stock after the Q4 earnings announcement.
Recap of the quarter
In the quarter, Anacor reported revenue to the tune of $9.6 million, a 13% improvement on a year-over-year basis. The improvement was majorly attributed to the successful launch of Kerydin used for toenail fungus treatment for which it had entered into a distribution and commercialization agreement with the Sandoz division of Novartis AG (NVS, Financial) in July 2014. Remarkably, revenue earned for the quarter almost doubled the analysts’ expectations of $4.47 million.
The pharmaceutical company has been struggling in the past few quarters as it has been reporting constant losses almost every quarter. But in this quarter, the pharmaceutical company managed to narrow down its losses and reported an EPS loss of $0.24 a share, against the market consensus of $0.61 loss per share.
The best part in the quarter that aided in reducing the EPS loss was the $65 million in upfront payments that was received from Sandoz in lieu of the marketing and distribution of Anacor’s toenail treatment medication Kerydin which had begun in September last year. Thus, the final quarter of 2014 would stay testimony to the successful commercialization of the drug Kerydin of Anacor that is expected to treat a condition referred to as onychomycosis which affects an estimate of 36 million people in the U.S.
Analysts weighing positively on the stock
Soon after the stock took an upward trajectory after the earnings release, its price target was increased by Wedbush from $50 to $60 in a research note published last Friday. Goldman Sachs analysts, who had initiated coverage on Anacor Pharmaceuticals stock on December 17, have set a neutral rating with a $36 price target on the stock.
Two other investment analysts are rating the company as “hold” and three have allocated a “buy” rating on the stock. Based on an average consensus, the stock presently holds a “buy” rating and a price target of $51 for its investors.
Currently, Anacor’s stock holds a 1-year low of $13.19 and a 1-year high of $56.98. Bearing this in mind, the average rating and price target estimated on the stock does look like a lucrative offer for the investors.
Final word
Anacor Pharmaceuticals is on an ultimate growth trajectory and investors should go ahead and book the stock which could become a source of their future earnings in the long run. Even several analysts worldwide are opining to hold or buy the stock, meaning the stock holds a lot of appeal after the fourth quarter earnings which were a fabulous number mix for the biopharmaceutical company.
