Why Santarus Shares Soared
May 7th 2013 12:25PM
Updated May 7th 2013 1:30PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of specialty biopharmaceutical company Santarus shot higher by as much as 16% after reporting better-than-expected first-quarter results.
So what: For the quarter, Santarus delivered revenue growth of 73% to $79.4 million as profits jumped dramatically to $0.25 per share from just $0.01 in the year-ago period. Wall Street had only been expecting revenue in the $74 million range and a profit per share of just $0.14. Gastrointestinal disorders drug Zegerid was the biggest winner, increasing sales 189% year-over-year to $24.6 million, though type 2 diabetes drug Glumetza -- which contributed about 52% of total revenue -- saw sales increase 33% as well. Looking forward, Santarus boosted its full-year revenue and EPS guidance from $320 million to $325 million and $0.63-$0.68, respectively, to $330 million to $340 million and $0.72-$0.81.
Now what: It was another great quarter for Santarus, but I'm still having trouble with the near-vertical ascent in its share price. In order for Santarus to keep its current valuation it'll need sales from recently approved mild-to-moderate ulcerative colitis drug, Uceris, to really take off -- and the $6.6 million generated this past quarter was just so-so in my books. I definitely feel it's a company worth watching, but I'd still rather be on the sidelines after this big run higher.
Craving more input? Start by adding Santarus to your free and personalized watchlist so you can keep up on the latest news with the company.
While you can certainly make huge gains in biotechs like Santarus, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
The article Why Santarus Shares Soared originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.