by Ian Harvey
March 01, 2019
Horizon Pharma PLC (NASDAQ: HZNP)
Horizon Pharma stock surges - up almost 5% after reporting better-than-expected results for the fourth quarter of 2018; then another 33% after reporting favorable results in a clinical trial the next day. And, “Cut-to-the-Chase Members” made 320% potential profits.
Horizon has built out a high-growth orphan-drug portfolio over the past three years, which has recently started to fire on all cylinders.
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
The Details Presented Previously……..
Share price of Horizon Pharma PLC (NASDAQ: HZNP) has increased 28.3% in the past year, against the industry's decline of 24.6%.
The orphan-drug maker Horizon Pharma has managed to maintain forward movement during this widespread downturn; because Horizon has built out a high-growth orphan-drug portfolio over the past three years, which has recently started to fire on all cylinders.
Horizon's strategy is to transform into a balanced, diversified, sustainable-growth biopharmaceutical company, predominantly focused on rare disease medicines.
In the third quarter, for instance, the company easily exceeded Wall Street's consensus revenue estimate, thanks to stronger-than-expected sales of its top orphan product, Krystexxa, which is used for chronic gout.
The best part of Horizon's story, though, is that this period of strong growth is only getting started. With Krystexxa and its primary-care business both on the upswing, Horizon's shares are only trading at about 2.5 times the company's projected 2019 sales. That's among the lowest price-to-sales ratios for a mid-cap company within the whole of the entire healthcare sector.
The company has been focused on expanding its orphan drug business, as evidenced by its long-range plan, wherein the orphan business is expected to constitute approximately 60% of net sales in 2020. Meanwhile, the company has been quite active on the acquisition front. In May 2015, Horizon acquired Hyperion in a deal valued at about $1.1 billion and added a couple of UCD drugs like Ravicti and Buphenyl/Ammonaps to its portfolio.
** OPTION TRADE: Buy HZNP MAR 15 2019 23.000 CALL at approximately $1.50The Result So Far………
On Wednesday, February 27, Horizon Pharma reported better-than-expected results for the fourth quarter of 2018. Following the news, the company's shares went up almost 5%.
The company reported fourth-quarter adjusted earnings of 67 cents per share, which beat the Consensus Estimate of 54 cents and were higher than 29 cents reported in the year-ago quarter.
The company reported record quarterly sales of $355.5 million, up 30% year over year. The top line also beat the Consensus Estimate of $333.8 million.
Then on Thursday, Horizon Pharma’s presented results for a clinical trial of its phase 3 confirmatory trial of its active thyroid eye disease treatment teprotumumab, hit the mark in a late-stage trial. Specifically, the company reported that as many as 82.9% of patients receiving teprotumumab exhibited a significant reduction in eye bulging -- the main cause of morbidity in TED. Horizon Pharma also noted that all of the study's secondary endpoints were met, and the drug's safety profile was consistent with its mid-stage trial results.
As Horizon CEO Tim Walbert described it, "This is a key milestone as we evolve into a research-focused company developing innovative new medicines to address challenging diseases with very few effective options." If the treatment can gain U.S. Food and Drug Administration approval quickly, it could serve to reignite Horizon's revenue growth at a key time for the company.
So, for “Cut-to-the-Chase Members”, who managed to execute this trade recommended by Stock Options Made Easy, and then exited Thursday; a profit of 320% was to be made. The cost of the call option was $1.50; and climbed as high as $6.30 during Thursday’s trading.
Therefore, one options contract would provide a profit of $480.
ANOTHER WIN FOR THE WEEK!
AS ALWAYS THE DECISION IS YOURS!
Teprotumumab, if approved, is projected to generate peak annual sales of around $750 million. That's a sizable commercial opportunity for a company with a market cap of only $4.71 billion. Teprotumumab's approval would also give Horizon two major orphan drugs going forward, with the other being the chronic gout medicine Krystexxa.
Horizon plans on filing for teprotumumab's approval in the U.S. by midyear. If that time line holds, the drug could be on the market by early next year. Horizon's white-hot revenue growth is expected to start to cool off this year, but Teprotumumab should provide a timely boost to the company's top line if everything goes according to plan on the regulatory front.
Even after this latest jump, the drugmaker's shares are still trading at less than 4 times next year's projected revenue haul.
Therefore, You may wish to consider a NEW Trade……..a long-term play…..
** OPTION TRADE: Buy HZNP JAN 17 2020 30.000 CALL at approximately $3.80. Sell price is left to your own judgment.
As you would have by now realized, some of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but it is obvious that it did not apply in this case; although the result of the earnings report before the trade certainly helped boost the profits when presented. During earnings season this strategy of predicting earnings has been very profitable.
Sometimes it is our approach to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use – such as found with the “Earnings Predictions Program”. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been exceptional.
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!
Strategies to Consider……
When To Exit A Trade Based On Earnings?.....Read Article
"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.……continue reading this article……
Our proven track record says it all!!
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