Impax Laboratories, Inc. (IPXL: 21.40 +0.10 +0.47%) just hit an all-time high at $22.39 on the heels of the early success of its generic Flomax drug and the continued success of its generic Adderall drug. Although the company expects sales of these two new products to cool moving forward as other competitors enter the space, they should still positively impact the bottom line for quite some time.Company Description
Impax Laboratories, Inc. is a specialty pharmaceutical company that engages in the development of branded and generic pharmaceuticals. The company sells its products in the United States and Puerta Rico and has a market cap of $1.37 billion.
Impax’s share price has been on fire for the last few months, jumping higher on the company’s amazing Q1 results from early May that were positively impacted by the release of its generic Flomax product and the continued success of its generic Adderall product.
First-Quarter Results
Revenue for the period jumped to $323 million from $39 million last year, with sales of Flomax accounting for $176 million of that growth. Earnings also looked great, coming in at $2.06, a 304% earnings surprise. Impax now has an average earnings surprise of 235% over the last four quarters.
Although the company acknowledges that the record-breaking results aren’t sustainable, it did sound an optimistic tone about the inclusion of two new products in its portfolio, with CEO Larry Hsu saying that, “The recent increase in cash flow generated from our operations, including our strong generic Flomax® and generic Adderall XR® product sales, will contribute significantly to our ongoing business development activities.”
Estimates JumpIn light of the great quarter and surging sales, analysts were quick to adjust their estimates. The current year is up $2.03 in the last 60 days to $3.32, a bullish 265% growth projection. The next-year estimate is still a bit of a wild care, currently pegged at $1.49 as analysts try to calculate the impact of increased competition down the road.
Valuation
As it stands, IPXL is trading at a steep discount to its peers with a forward P/E multiple of 6.5X. But keep in mind that number has a short-term bias related to sales spiking on the release of Flomax.
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