Jazz Pharma Shares Fall After Q4 Sales Miss Street View

Shares of Jazz Pharmaceuticals plc

fell as much as 6 percent Wednesday after the company's fourth quarter revenue fell short of Street view. Dublin, Ireland-based company earned $1.32 a share for the fourth quarter. Excluding items, earnings were $2.60 a share, which came in line with analysts' consensus estimate. The drugmaker posted revenue of $340.9 million in the period, which missed Street forecast of $350.3 million. Jazz expects full-year earnings in the range of $10.90 to $11.30 a share, with revenue in the range of $1.49 billion to $1.55 billion. Analysts, on average, expect earnings of $11.42 a share on revenue of $1.54 billion. Deutsche Bank trimmed its 2016 EPS estimate to $9.84 from $11.08 and revenue view to $1.52 billion from $1.56 billion. The brokerage, which has a Buy rating on JAZZ, also cut its target price on the stock to $155 from $167. Analyst Gregg Gilbert said: "We note that 2016 could be a pivotal year for JAZZ based on several catalysts, including: 1) potentially greater certainty on Xyrem duration via a patent settlement or a win in court, 2) FDA approval and launch of defibrotide, 3) positive JZP-110 Phase III results, 4) updates on JAZZ's Xyrem lifecycle management programs, and 5) deal activity supported by an under-leveraged balance sheet." Meanwhile, Stifel analyst Annabel Samimy also cut the price target on JAZZ stock by $25 to $200. The analyst said the growth of the company's narcolepsy drug Xyrem is intact but maturing, and hence look forward to the FDA decision on defibrotide (3/31/16) and its immediate launch upon approval to invigorate growth. Defibrotide is an investigational agent proposed for the treatment hepatic veno-occlusive disease (VOD), a fatal condition leading to multiorgan failure. "Importantly, we think with asset revaluations, JAZZ is reprioritizing M&A within its capital allocation decisions. We see JAZZ as an underappreciated story given new growth opportunities and greater durability than it is currently credited with. We look forward to diversification with defibrotide, but proceed with a more cautious launch in the current environment," Samimy said in a client note. Shares of JAZZ have dropped 15 percent this year, while the broader S&P 500 index have fell only 6 percent.