Aegerion (AEGR): What Awaits For The Stock In Q2 Earnings?

Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) is expected to report second-quarter 2016 results on Aug 3. Last quarter, Aegerion recorded a negative earnings surprise of 242.59%. Let’s see how things are shaping up for the company this quarter.

Factors at Play

Although Juxtapid, which is approved for the treatment of homozygous familial hypercholesterolemia (HoFH), remains the key growth driver at Aegerion, the drug has been witnessing decreasing sales in the U.S. due to a reduction in patients on therapy.

Launch of PCSK9 inhibitors – Repatha and Praluent – in the U.S. has dampened Juxtapid sales and will continue to do so in the upcoming quarters. Aegerion now expects Juxtapid sales to be in the range of $90–$100 million, compared with the previous projection of $120–$140 million. Consequently, net product sales are now expected in the range of $130–$150 million, lower than the previous guidance of $160–$190 million.

Moreover, the company is facing a tough time in commercializing the drug in ex-U.S. markets. The company also expects quantities and timing of orders for patient sales in ex-U.S. markets to remain choppy on a quarter-to-quarter basis.

A significant order from the Brazilian Ministry of Health will likely to be booked in the second quarter as expected earlier. In its first-quarter conference call, the company noted that it had then received net orders worth $6.2 million for the second quarter.

To mitigate the impact of persistent competitive pressures on the product, the company stated its plans to withdraw Juxtapid from the EU and certain other global markets by the end of 2016, unless it finds suitable partners. However, certain infrastructure in the EU will be maintained to support a potential launch of Myalept (metreleptin for injection), upon an anticipated approval in late 2017.

Aegerion had earlier announced plans to reduce the global workforce by the end of second-quarter 2016. Last month, the company cut the same by 13%. This came as a part of the company’s strategy of lowering operating expenses and improving its cash position by 2017.

In June, Aegerion entered into a definitive merger agreement, under which it will combine with a wholly owned indirect subsidiary of QLT Inc., (QLTI) to form a global biopharmaceutical company, Novelion Therapeutics Inc. Novelion will focus solely on rare diseases. The transaction is expected to close late third-quarter 2016 or fourth-quarter 2016.

In its second-quarter conference call, we expect the company to shed more light on its plans on maximizing growth opportunities for Myalept and the restructuring agreement with QLT.

Surprise History

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Aegerion has a mixed track record so far. The company has beaten estimates in three of the last four trailing quarters, with an average negative surprise of 6.08%.