In the fourth-quarter ended December 2014, Actavis Plc [NYSE:ACT] reported revenues of $4.06 billion, up 46% year-over-year and EPS with ex-items of $3.91 per share, up 23.3% year-over-year. Wall Street was expecting earnings of $3.67 per share on revenue of $3.84 billion.

For the full year of 2014, revenue was $13.06 billion, up 50% compared to $8.68 billion for the previous year. Full year non-GAAP EPS was $13.98 per share, up 47% compared to non-GAAP EPS of $9.50 per share for 2013.

Actavis has over 1000 products in a wide range of therapeutic categories, including antibiotics, anti-inflammatories, oncology medications, cardiovascular treatments, respiratory products, dermatology products and treatments for central nervous system and metabolic disorders. 

North American Brands revenue increased from $635.1 million to $1.83 billion, driven by acquisitions and sales of legacy products including Namenda®, Bystolic®, Linzess®, Lo Loestrin® Fe, Estrace® Cream, Daliresp™ and Tudorza®.

North American Generics and International revenue was $1.78 billion, consisting of all brands, branded generics, generics and over-the-counter pharmaceutical revenue derived outside North America. Key products include Lidoderm® and generic Concerta®.

Anda Distribution revenue increased 16% to $443.3 million, compared to $383.0 million in the fourth quarter 2013. Actavis' Anda, Inc. Distribution business primarily distributes generic, select brand pharmaceutical products, vaccines, injectables and OTC medicines from more than 200 suppliers to more than 60,000 U.S. locations.

Looking forward, Actavis sees revenues of $15.0 billion in 2015 and a non-GAAP diluted EPS of $16.30 to $17.30 per share, compared with analysts' estimates for $16.63 per share on revenues of $15.6 billion. Actavis said it plans to change its name to Allergan. The company acquired Allergan, the maker of Botox, in November 2014 for $66 billion. 

Actavis is transitioning all Namenda IR twice-daily tablet patients to Namenda XR®, a once-daily product. In September 2014, the company was sued by New York Attorney General Eric Schneiderman over claims it is trying to block generic competition by the transition from a twice-daily to a once-daily product to maintain high prices. 

A federal court judge issued a preliminary injunction in December to continue selling the twice-daily tablet Namenda IR. Namenda generated total revenues of $1.5 billion in fiscal year ending December 2014, with revenues from Namenda XR of $135.8 million.

Actavis is collaborating with Amgen [NASDAQ:AMGN] to develop and commercialize, on a worldwide basis, biosimilar versions of Herceptin®, Avastin®, Rituxan/Mab Thera®, and Erbitux®. The company is also collaborating with privately held Itero Biopharmaceuticals to develop a recombinant follicle stimulating hormone (rFSH) product, as a biosimilar molecule for the treatment of female infertility.

Since the beginning of 2014, ACT has been moving in a rising wedge chart pattern. The stock broke out of the rising wedge in November 2014. Although Actavis said in its 10-K filing that the company is exposed to market risks and impacts of foreign currency exchange rate changes, the company reported the effect of currency exchange rate changes on cash and cash equivalents of $3.8 million in fourth quarter 2014 and $5.9 million for the full year 2014.

From our technical analysis, the 12-month price projection for ACT is $398.00. Canaccord Genuity raised their target price for ACT last Thursday from $300.00 to $352.00, while Argus Research’s price target for ACT was raised from $310.00 to $340.00.

Disclosure: Long Position ACT in Portfolio