Cardiome (CRME) Q1 Loss Wider Than Expected, Sales Miss

Cardiome Pharma Corp. (NASDAQ:CRME) reported loss of 20 cents per share in first quarter of 2017. Reported loss is wider than both the Zacks Consensus Estimate of a loss of 15 cents and year-ago loss of 9 cents. The wider loss can primarily be attributed to a decrease in revenues and an increase in selling, general and administration expenses in the quarter.

So far this year, Cardiome’s shares have significantly outperformed Zacks classified Medical-Drugs industry. The company’s shares have gained 23.9% while the industry registered an increase of 8.1%.



Quarterly revenues plunged 26.8% year over year to $5.2 million. Reported revenues also missed the Zacks Consensus Estimate of $7 million. The decrease in revenues was due to the timing of distributor sales. In the year-ago quarter, the company recorded revenues of $1.7 million from an annual order to a distributor.

Quarter in Detail

Net revenue for the quarter included product and royalty revenues of $5.2 million (down 26%) and licensing and other fees of $0.05 million (down 2.1%).

Cardiome’s selling, general and administrative (SG&A) expenses were up 30.2% to $8.2 million. This was due to expansion of the company’s direct sales force in Europe related to the launch of Xydalba and the initiation of a Canadian sales force.

In the first quarter of 2017, the company reported gross margin of 68.5% compared with 79.9% a year ago. The drop in gross margin resulted from customer mix, as a significant portion of the company’s sales in the first quarter was through distributor lower margins.

Moreover, during the same period the company launched Xydalba in France. The drug is already approved in the EU for the treatment of acute bacterial skin and skin structure infections (ABSSSI) in adults. The company licensed Xydalba from Allergan plc (NYSE:AGN) in the second quarter of 2016 to commercialize it in U.S. and the rest of the world.

2017 Guidance

The company expects revenues in the range of $28–$30 million in 2017. The company anticipates a one-year dip in Aggrastat revenues due to global inventory management issues in Middle East. Aggrastat is indicated for use in patients with acute coronary syndrome, which are commercially available in markets outside the U.S.

Zacks Rank & Key Picks

Cardiome currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Aeglea BioTherapeutics (NASDAQ:AGLE) and VIVUS, Inc. (NASDAQ:VVUS) . While Aeglea carries a Zacks Rank #2 (Buy), VIVUS sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aeglea’s loss per share estimates narrowed from $3.64 to $2.48 for 2017, over the last 60 days. The company posted positive earnings surprises in three of the four trailing quarters with an average beat of 20.75%.

VIVUS’s loss per share estimates narrowed from 50 cents to 39 cents for 2017, over the last 30 days. The company posted positive earnings surprises in all of the four trailing quarters with an average beat of 233.69%.

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