Aegerion Pharmaceuticals, Inc. (AEGR) reported second quarter 2014 net loss per share of 33 cents, narrower than the Zacks Consensus Estimate of a loss of 42 cents and the year-ago loss of 66 cents.

Aegerion Pharmaceuticals, Inc - Earnings Surprise | FindTheBest

In the reported quarter, net product sales increased 454.9% from the year-ago quarter to $36 million, but missed the Zacks Consensus Estimate of $37 million.

The Quarter in Detail

Research and development (R&D) expenses were $8.9 million, up 17.4% from the year-ago quarter. The rise in R&D expenditure was primarily due to increased headcount and international regulatory activities including regulatory requirements in Brazil, and pipeline development.

Selling, general and administrative (SG&A) expenses scaled up 91.9% year over year to $32.3 million mainly due to a higher headcount, commercialization of Juxtapid in the U.S., global expansion and increased legal fees.

In the reported quarter, Aegerion experienced solid prescription growth in the U.S. for Juxtapid. 45% of the prescriptions were written by new prescribers, which is similar to the rate achieved in the first quarter.

As far as ex-U.S. markets are concerned, Aegerion achieved partial recovery of federal orders in Brazil. This has led to a notable increase in Juxtapid revenues in Brazil. In Canada, Aegerion recorded its first revenues in the reported quarter.

Pipeline Update

Juxtapid is in a phase III study as an adjunct treatment to reduce low-density lipoprotein cholesterol in Japanese patients suffering from homozygous familial hypercholesterolemia (HoFH). The company expects to complete patient enrolment by the end of this week and intends to submit a new drug application for Juxtapid for this indication in Japan in mid 2015. Additionally, Aegerion is looking to conduct a pediatric study on Juxtapid for HoFH later in 2014.

2014 Outlook Maintained

Aegerion expects full-year Juxtapid net sales to be closer to the lower end of the guidance range of $180 million − $200 million (provided on its first quarter earnings call). The Zacks Consensus Estimate of $180 million is in line with the company’s expectations.

In addition, Aegerion anticipates that it might face continued unpredictability in Brazil. The company expects Juxtapid’s revenues from named patient sales to fluctuate quarter-over-quarter depending on delay or long-term around times of government orders.

Aegerion expects operating expenses in 2014 (including stock-based compensation) to lie in the range of $185 million − $195 million.

Our Take

Juxtapid is the only marketed product in Aegerion’s portfolio. The approval of the product in Dec 2012 was a major milestone for the company. Although the company is facing regulatory issues in Brazil, overall Juxtapid sales are showing an uptrend. In the second quarter, Juxtapid revenues rose 33.5% sequentially. With steady growth in the number of prescriptions written in the U.S. and the company’s efforts to drive sales, we expect the second half of the year to bring in more revenues from Juxtapid.

Aegerion carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the biotech sector are Actelion Ltd. (ALIOF), Enzo Biochem Inc. (ENZ) and Alexion Pharmaceuticals, Inc. (ALXN). While Actelion and Enzo Biochem carry a Zacks Rank #1 (Strong Buy), Alexion holds a Zacks Rank #2 (Buy).

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