The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Collegium Pharmaceutical (NASDAQ: COLL) and the rest of the branded pharmaceuticals stocks fared in Q4.
The branded pharmaceutical industry relies on a high-cost, high-reward business model, driven by substantial investments in research and development to create innovative, patent-protected drugs. Successful products can generate significant revenue streams over their patent life, and the larger a roster of drugs, the stronger a moat a company enjoys. However, the business model is inherently risky, with high failure rates during clinical trials, lengthy regulatory approval processes, and intense competition from generic and biosimilar manufacturers once patents expire. These challenges, combined with scrutiny over drug pricing, create a complex operating environment. Looking ahead, the industry is positioned for tailwinds from advancements in precision medicine, increasing adoption of AI to enhance drug development efficiency, and growing global demand for treatments addressing chronic and rare diseases. However, headwinds include heightened regulatory scrutiny, pricing pressures from governments and insurers, and the looming patent cliffs for key blockbuster drugs. Patent cliffs bring about competition from generics, forcing branded pharmaceutical companies back to the drawing board to find the next big thing.
The 11 branded pharmaceuticals stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.3%.
In light of this news, share prices of the companies have held steady as they are up 1.4% on average since the latest earnings results.
Collegium Pharmaceutical (NASDAQ: COLL)
Pioneering abuse-deterrent technology in a field plagued by addiction concerns, Collegium Pharmaceutical (NASDAQ: COLL) develops and markets specialty medications for treating moderate to severe pain, including abuse-deterrent opioid formulations.
Collegium Pharmaceutical reported revenues of $181.9 million, up 21.5% year on year. This print exceeded analysts’ expectations by 1%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EPS estimates and full-year revenue guidance meeting analysts’ expectations.
“2024 was a year of strong execution for Collegium, marked by robust performance in our pain portfolio and the addition of Jornay PM, establishing our presence in neuropsychiatry and reaffirming our commitment to helping improve the lives of people living with serious medical conditions. This was made possible thanks to the dedication of our talented team,” said Vikram Karnani, President and Chief Executive Officer.
The stock is up 6.2% since reporting and currently trades at $30.20.
Is now the time to buy Collegium Pharmaceutical? Access our full analysis of the earnings results here, it’s free.
Best Q4: Supernus Pharmaceuticals (NASDAQ: SUPN)
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Supernus Pharmaceuticals reported revenues of $174.2 million, up 6% year on year, outperforming analysts’ expectations by 12.2%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and full-year operating income guidance topping analysts’ expectations.
Supernus Pharmaceuticals achieved the biggest analyst estimates beat among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 4.6% since reporting. It currently trades at $31.32.
Is now the time to buy Supernus Pharmaceuticals? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Zoetis (NYSE: ZTS)
Originally spun off from Pfizer in 2013 as the world's largest pure-play animal health company, Zoetis (NYSE: ZTS) discovers, develops, and sells medicines, vaccines, diagnostic products, and services for pets and livestock animals worldwide.
Zoetis reported revenues of $2.32 billion, up 4.7% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
As expected, the stock is down 6.9% since the results and currently trades at $161.91.
Read our full analysis of Zoetis’s results here.
Royalty Pharma (NASDAQ: RPRX)
Pioneering a unique business model in the pharmaceutical industry since 1996, Royalty Pharma (NASDAQ: RPRX) acquires rights to receive portions of sales from successful biopharmaceutical products, providing funding to drug developers without conducting research itself.
Royalty Pharma reported revenues of $594 million, flat year on year. This print lagged analysts' expectations by 1.9%. Overall, it was a slower quarter for the company.
The stock is flat since reporting and currently trades at $31.77.
Read our full, actionable report on Royalty Pharma here, it’s free.
Organon (NYSE: OGN)
Spun off from Merck in 2021 to create a company dedicated to addressing unmet needs in women's health, Organon (NYSE: OGN) is a global healthcare company focused on improving women's health through prescription therapies, medical devices, biosimilars, and established medicines.
Organon reported revenues of $1.59 billion, flat year on year. This number surpassed analysts’ expectations by 0.9%. However, it was a slower quarter as it logged full-year revenue guidance missing analysts’ expectations.
Organon had the slowest revenue growth among its peers. The stock is down 3.1% since reporting and currently trades at $14.23.
Read our full, actionable report on Organon here, it’s free.
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