|Healthcare Review: Tenet Healthcare, ImmunoCellular, InterMune, Dara Biosciences, Vivus|
|By Staff and Wire Reports|
|Tuesday, 25 February 2014 14:00|
Tenet Healthcare ($THC) is the S&P 500's worst performer as Q4 earnings beat forecasts but took on $400M in new debt and offered lower-than-expected guidance; the hospital operator sees Q1 adjusted EBITDA of $350M-$400M and FY 2014 EBITDA of $1.8B-$1.9B vs. analyst consensus estimates of $447M and $1.96B. THC reported Q4 adjusted admissions fell 0.5%, as inpatient admissions fell 2.3%; operating margin narrowed to 4.3% from 9.1%, as operating expenses jumped 75%. CRT Capital downgrades THC to Fair Value from Buy as accretion from the Vanguard Health Systems acquisition has not materialized in the near-term; instead of generating significant EBITDA growth, the business contracted from Q4 to Q1 and CRT's guidance suggests that the business will continue to shrink.
ImmunoCellular Therapeutics ($IMUC) says it has been granted orphan drug designation for ICT-107 for the treatment of patients with glioblastoma. Granting of orphan drug status in the EU provides sponsor companies with incentives, including a 10-year period of market exclusivity, access to a centralized review process, trial design assistance and scientific advice during product development, fee reductions, and tax incentives.
InterMune ($ITMN) shares rocket 122% after the company's Pirfenidone treatment for the idiopathic pulmonary fibrosis met primary and secondary endpoints in a Phase III trial. The results mark a turnaround for Pirfenidone, which the FDA rejected in May 2010 due to a lack of evidence for the efficacy of Pirfenidone in treating the lung disease.
Dara Biosciences' ($DARA) surges 39.4% after the FDA grants Orphan Drug Designation to the company's KRN5500 treatment for chronic neuropathic pain caused by chemotherapy. Dara is now looking at funding options for the further development of KRN5500.Earlier this month, Jason Napodano of Zacks wrote that "orphan drug designation on KRN5500 could triple the market value" of Dara.
Vivus ($VVUS) slumps 13.9% to $5.81 despite the company's Q4 earnings beat. However, as SA author Spencer Osborne points out, EPS only topped forecasts because of a one-time licensing payment of $34.8M for Vivus' erectile dysfunction drug. Sales of anti-obesity drug Qsymia were $7.7M, in line with estimates at Needham. Qsymia prescriptions +14% on quarter to 124,000.Needham analyst Alan Carr notes that management was disappointed with sales levels, and "outlined plans to improve physician and patient education as well as revenue/prescription in 2014."Qsymia brought in $62.09 per prescription filled in Q4.