Pharma stock under pressure: Taro Pharmaceutical Industries Ltd. (NYSE: TARO)

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Taro Pharmaceutical Industries Ltd. (NYSE: TARO) stock fell over 0.5% on May 20th, 2020 (as of  11:27 am GMT-4; Source: Google finance) after the company posted mixed results for the fourth quarter of FY 20. The company generated cash flow provided by operations for the year ended March 31, 2020, of $271.6 million compared to $323.7 million for the year ended March 31, 2019. At the end of March, 2020, cash and cash equivalents and marketable securities (both short and long-term) increased $214.7 million to $1.6 billion from March 31, 2019 due to the impact from the $27.0 million Tender Offer paid in December 2019. Overall, the company has reported net income attributable to Taro of $54.2 million in the fourth quarter of FY 20 compared to $58.4 million in Q4 2019, which reflects a $4.2 million decrease.

Meanwhile, the company has recently received approvals from the U.S. Food and Drug Administration (FDA) for four Abbreviated New Drug Applications (ANDAs); Mupirocin Cream USP, 2%, Ivermectin Lotion, 0.5%, Clindamycin Phosphate Foam, 1% and Clocortolone Pivalate Cream USP, 0.1%. The Company currently has an aggregate of twenty-one ANDAs awaiting FDA approval, including five tentative approvals.

Moreover, the company has voluntarily recalling two lots of Phenytoin Oral Suspension USP, 125 mg/5 mL both in 237 mL bottles, to the consumer level. Phenytoin Oral Suspension USP, 125 mg/5 mL is indicated for the treatment of tonic-clonic (grand mal) and psychomotor (temporal lobe) seizures and is packaged in amber plastic bottles with an inner seal and a white child proof closure, and each bottle contains 237 mL.

TARO in the fourth quarter of FY 20 has reported the adjusted earnings per share of $1.42, missing the analysts’ estimates for the adjusted earnings per share of $1.53, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue decline of $5 million to $174.94 million in the fourth quarter of FY 20, beating the analysts’ estimates for revenue by 3.98%. The company has delivered the gross profit of $102.3 million (58.5% of net sales compared to 66.4%), which decreased by $17.3 million. The company has incurred research and development (R&D) expenses of $15.8 million, which has decreased $4.7 million. The company posted the operating income of $57.2 million (32.7% of net sales compared to 41.9%), which reflects the decrease of $18.2 million.

On the other hand, the company has appointment of Daphne Huang as Vice President, CFO and Chief Accounting Officer in April.

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