The Zacks Analyst Blog Highlights: Microsoft, VIVUS, Arena Pharmaceuticals,
Orexigen Therapeutics and UCB
CHICAGO, April 19, 2013
CHICAGO, April 19, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Microsoft (Nasdaq:MSFT), VIVUS,
Inc. (Nasdaq:VVUS), Arena Pharmaceuticals, Inc. (Nasdaq:ARNA), Orexigen
Therapeutics, Inc. (Nasdaq:OREX) and UCB (OTC:UCBJF).
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Here are highlights from Thursday's Analyst Blog:
Microsoft Posts Strong Earnings
The world's largest software company Microsoft (Nasdaq:MSFT) reported earnings
just after the bell, EPS $0.72, surpassing Zacks consensus estimate of $0.67.
Revenues came in just below Zacks estimate of $20.5 billion, at $20.49
Analysts were concerned about PC sales/demand; Q1 was the fourth consecutive
quarter with Y/Y decline in PC sales, the single worse quarter in PC sales
history since 1994. In addition to PC sales, analysts were also concerned
with the tepid reception of Windows 8, and weakness in emerging markets.
These issues caused a significant negative agreement amongst covering
analysts, but MSFT was able to outperform their expectations.
The earnings beat caused the stock to jump 1.77% in afterhours trading. While
MSFT beat the earnings consensus estimates, expense management was the major
driver in the strong earnings numbers. Furthermore, revenue growth remains a
major concern for future quarters, as well as the disappointing Windows 8 OS.
The combination of these two factors, have analysts worried that there is no
clear option as a driver of future growth over the near term.
While Microsoft has attempted to find more avenues for revenues, for example
the patent licensing deal with Hon Hai (producer of 40% of the world's
consumer electronics), they have not produced a strong game changing product
for an elongated period of time. More significantly, MSFT emergence in the
mobile device remains a weakness for the company.
On a positive note, Microsoft continues to reduce costs, and sees decent sales
of their Windows 7 and 8 operating systems.
Expanded Access for VVUS' Qsymia
VIVUS, Inc. (Nasdaq:VVUS) recently announced that the amendment and
modification to the Risk Evaluation and Mitigation Strategy (REMS) of its
obesity drug, Qsymia (phentermine and topiramate extended-release) has been
approved by the US Food and Drug Administration (FDA).
As per the modification to the REMS, Qsymia can now be distributed through
certified retail pharmacies apart from the existing certified mail-order
pharmacy network. VIVUS had launched Qsymia through some of the leading home
delivery networks. We believe the approval of the amended REMS will increase
access to Qsymia and thus boost sales.
We remind investors that Qsymia, VIVUS' sole marketed product, was launched in
Sep 2012. The FDA cleared Qsymia in Jul 2012 as an adjunct to a healthy diet
(low on calories) and increased physical activity for chronic weight
management in obese (Body Mass Index, or BMI - 30 or more) or overweight (BMI
- 27 or more) adults suffering from at least one weight-related co-morbid
Qsymia revenues in the fourth quarter of 2012 were only $2 million. The uptake
has been slow due to the high out-of-pocket cost burden on patients owing to a
lack of reimbursement for the product. Although, the company is working on
resolving the issue, we believe that it may take some time given that obesity
is a new and underdeveloped market.
We remind investors that apart from Qsymia, another weight-loss drug, Arena
Pharmaceuticals, Inc. (Nasdaq:ARNA) Belviq, also received approval in the US
last year. Orexigen Therapeutics, Inc. (Nasdaq:OREX) is also developing a
candidate, Contrave, targeting the lucrative obesity market.
VIVUS, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Biopharma
stocks that currently look attractive include companies like UCB (OTC:UCBJF)
carrying a Zacks Rank #1 (Strong Buy).
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