Par Pharma 1Q earnings fall, but shares rise on adj. profit

WOODCLIFF LAKE, N.J.—Shares of Par Pharmaceutical Cos. rose Friday even though the generic drug maker's profit fell nearly 94 percent, as adjusted profit beat Wall Street estimates and its 2008 earnings projection came within expectations.

The company earned $2.6 million, or 8 cents per share, compared with $41.5 million, or $1.19 cents per share, in the year-ago period. However, excluding a one-time charge related to commercialization rights to a late-stage drug candidate, Par earned 17 cents per share in the quarter.

Revenue dropped 34 percent to $154.9 million from $234.2 million in the first quarter of 2007.

Analysts surveyed by Thomson Financial expected, on average, profit of 12 cents on revenue of $151 million.

Par said the decline in revenue was due to pricing pressure for its generic drugs as well as the launch of a large number of new generic products in 2007.

The company added that its research and development costs increased 22 percent to $17 million due to a $5 million upfront payment to Alfacell Corp. to gain commercialization rights to the cancer drug Oncanase.

Par also said it expects a full-year profit of between 65 and 85 cents per share.

Analysts surveyed by Thomson Financial expect a profit of 71 cents on revenue of $612.8 million.

However, Par said its profit estimates exclude the impact of milestone payments related to its Strativa branded products division, as well as the launch of four new generic drugs, which could have an impacts of between 25 and 47 cents per share.

The company also said that between 2009 and 2012, it expect to launch up to 15 new generic products.

Shares of Par closed up $1.13, or about 7 percent, to $18.13.