Stifel Asks: How High Will Horizon Pharma Guidance Go?

In a report published Monday, Stifel analyst Annabel Samimy maintained a Buy rating on Horizon Pharma PLC (NASDAQ: HZNP), while raising the price target from $30 to $40. The company's core business seems to be "exceeding all expectations," Samimy noted.Horizon Pharma has managed through the first quarter of PBM exclusion of Duexis and Vimovo. The company posted 8 percent q/q growth and -14 percent q/q TRx growth, respectively. Taking into account the 35 percent price hike, from January 1, 2015, the products are likely to beat expectations. Pennsaid 2 percent has had a strong re-launch, with pricing at par with Duexis/Vimovo and 104 percent q/q TRx growth. The performance of this product is on track to generating more than double the acquisition cost of $45mn."Going into 1Q15 earnings with visibly strong prescription trends, further confirmed by an announcement earlier this week on 1Q15 TRx growth rates, we firmly believe that HZNP will report a strong beat on the quarter relative to Consensus and our high-on-the-Street 1Q15 estimates," Samimy wrote.Although the volume figures for Actimmune are not available, the company is likely to report sales growth even if it is only on the back of the price hike of about 10 percent announced on January 1. "Further, with the COMPASS program rolling out this quarter, we expect additional patient additions, though at a similar rate as prior months. We believe HZNP will be well-primed to add Ravicti/buphenyl(urea cycle disorders) to its infrastructure when Hyperion closes," the report added.