Cubist Pharma Projects $2 Bln In Revenue By 2017

Cubist Pharmaceuticals Inc. (CBST) on Monday unveiled its five-year strategic plan, including goals for top and bottom-line growth as well as future pipeline developments.

Ahead of the its investor day, Cubist said that by year-end 2017, it expects to grow global revenue to $2 billion annually, have four product candidates in late-stage clinical trials, and generate $700 million in annual adjusted operating income. The biopharmaceutical company had reported fiscal 2011 revenues of $754 million.

Michael Bonney, President and Chief Executive Officer of Cubist said, "Our Building Blocks of Growth will help us build on this momentum as we look to deliver important new medicines for patients and drive long-term value for our customers and shareholders. The next five years represent an extraordinary time of opportunity for Cubist, and our entire team is excited to deliver on the Company's very promising future."

Massachusetts-based Cubist expects the $2 billion in global revenue in 2017 to be driven largely by organic growth.

Cubist projects sales of its antibiotic drug Cubicin will exceed $1 billion in U.S. sales alone by the end of 2017. The company also expects to expand the growth of Entereg, which is expected to reach $100 million in sales by the end of that year. Further, the company plans to optimize its current late-stage pipeline, led by CXA-201, CB-315, and CB-5945.

Cubist expects to deliver one investigational new drug application or IND about every 18 months from its own discovery efforts. The company projects additional pipeline assets to result from mergers and acquisitions, in-licensing, and other partnerships.

Cubist noted that based on its 2012 guidance, the $700 million in annual adjusted operating income by year-end 2017 translates into about a 22 percent compound annual growth rate or CAGR.

As a percentage of net revenue, the company expects R&D expense to trend down to 25 percent, with SG&A expense at about 20 percent, and overall cost of goods sold trending down to about 20 percent by year-end 2017.

In mid-April, Cubist reported an increase in profit for the first quarter to $32.79 million or $0.45 per share from $22.59 million or $0.34 per share in the year-ago period. Total revenues for the quarter grew 30 percent from the prior-year quarter to $211.69 million.

In Monday's regular session, CBST is trading at $41.11, down $0.24 or 0.58 percent on a volume of 17,660 shares.

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