Barr Pharmaceuticals Beats Targets

Brand-name drugs were good to the company in the second quarter.
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Updated from 7:44 a.m. EST

Shares of

Barr Pharmaceuticals

(BRL)

rose Tuesday after the company posted second-quarter results that easily beat Wall Street's estimates.

Although Barr specializes in generic drugs, the quarter was propelled by brand-name drugs, whose sales rose 25% to $80 million vs. the same period in 2004. Generic-drug sales gained 9% to $209 million. Revenue based on alliances with other companies leaped to $36 million from $1.6 million.

By late morning, Barr's stock was up $1.54, or 2.3%, to $69.04. The stock rose as high as $70.25. Trading volume of 1.26 million shares exceeded the daily average of 744,134 over the past three months.

On a GAAP basis, the Woodcliff Lake, N.J., drugmaker made $95 million, or 88 cents a share, for the quarter ended Dec. 31, up from the year-ago $59 million, or 56 cents a share. Revenue rose 26% from a year ago to $326 million.

Excluding one-time items, Barr's second-quarter profit was 85 cents, well above the average estimate of 78 cents analysts supplied to Thomson First Call. The consensus sales forecast was $316 million.

"Strong sales of both our generic and proprietary product portfolios, including the highest quarterly sales ever of our Seasonale extended-cycle oral contraceptive, and $36 million of alliance, development and other revenue drove the robust results for the quarter," said Bruce L. Downey, the chairman and CEO.

Seasonale reduces the number of periods in a woman's menstrual cycle to four from 13. Downey told analysts Tuesday that Seasonale will exceed the $100 million sales target for the fiscal year ending June 30. Seasonale produced $29 million in revenue during the second quarter, up 40%.

Downey said his company is in "active dialogue" with the Food and Drug Administration over Seasonique, another extended-cycle oral contraceptive.

The FDA granted conditional approval in August, but the company hasn't provided details or a timetable for meeting the conditions. Downey also said Barr is holding talks with the FDA for a low-dose version of Seasonale called Seasonale Lo.

Although total generic drug sales rose 9%, sales of generic oral contraceptives declined 6% to $96 million. Barr sells 22 generic oral contraceptives.

The company raised its fiscal-year earnings guidance to a range of $3 to $3.15 a share, up from a range of $2.95 to $3.10. The consensus estimate had been $3.10.

Barr's guidance excludes the effect of potential outcomes to patent challenges or other business development activities that may be completed by June 30, as well as the possible impact resulting from a share repurchase program authorized through Dec. 31.