It has been about a month since the last earnings report for Ophthotech Corporation . Shares have lost about 2.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Ophthotech Posts Wider-than-Expected Q4 Loss, Sales Miss
Ophthotech reported fourth-quarter 2016 loss of $1.86 per share, wider than both the Zacks Consensus Estimate of a loss of $1.64 and the year-ago loss of $1.02.
Ophthotech does not have any approved product in its portfolio yet. The company’s top line solely comprises collaboration revenues earned through its licensing and commercialization agreement with Novartis.
Collaboration revenues increased 11.3% year over year to $5.3 million, primarily due to a rise in drug shipment to Novartis. Reported revenues, however, missed the Zacks Consensus Estimate of $6.3 million.
Quarter in Detail
Research and development expenses increased 75.2% to $59.4 million, mainly due to costs related to the phase III program on Fovista.
General and administrative expenses increased 7.4% from the year-ago period to $13 million due to higher costs to support the company's expanded operations and additional staffing.
2016 Results
Full-year sales dipped 1.2% year over year to $50.9 million. Sales missed the Zacks Consensus Estimate of $51.5 million.
The full-year loss of $5.45 per share was wider than the Zacks Consensus Estimate of a loss of $5.24. The company had incurred a loss of $3.06 per share a year ago.
Strategic & Restructuring Initiatives
In Dec 2016, Ophthotech along with Novartis, announced disappointing results from two pivotal phase III studies – OPH1002 and OPH1003 – evaluating Fovista, in combination with Lucentis, for the treatment of wet AMD. Data revealed that both the studies failed to meet the primary endpoint of a mean change in best corrected visual acuity from baseline at 12 months. At the fourth-quarter conference call, the company said that further analyses of the data failed to demonstrate any clinically meaningful benefit for any subgroup of patients. They have stopped treating patients and terminated the OPH1002 and OPH1003 trials as well as the Fovista expansion study.
Following this, Ophthotech announced that it has initiated a strategic review plan. It will also cut its workforce by 80%, immediately terminate and wind down Fovista OPH1002 and OPH1003 studies and end Fovista phase II expansion study and cancel Fovista manufacturing commitments. These decisions are expected to be largely completed by the second quarter of 2017.
At the call, the company said that it will reassess the Fovista and Zimura development programs in 2017 and may modify, expand or terminate some or all of these development programs as a result of the same. While the final decision for Fovista will depend on the top-line results of the OPH1004 study (Fovista in combination with Eylea or Avastin – data expected in second half of 2017) that of Zimura development program will depend on the results of a competitor Roche's phase III studies on ophthalmology candidate, lampalizumab in dry AMD (data expected in the second half of 2017). The company will also review the scientific rationale for studying Fovista and Zimura in one or new ophthalmic indications.
At the end of 2016, the company had cash, cash equivalents and available-for-sale securities of $289.3 million. Of this, approximately $100–$115 million will be spent for workforce reductions, terminating facility leases; terminating and winding down Fovista OPH1002 and OPH1003 studies and ending Fovista expansion study, completing Fovista OPH1004 study and canceling Fovista manufacturing commitment.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter. In the past month, the consensus estimate also shifted upward by 13.4% due to these changes.
VGM Scores
At this time, Ophthotech's stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been trending upward for the stock. The magnitude of this revision also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Ophthotech (OPHT) Down 2.9% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Ophthotech Corporation . Shares have lost about 2.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Ophthotech Posts Wider-than-Expected Q4 Loss, Sales Miss
Ophthotech reported fourth-quarter 2016 loss of $1.86 per share, wider than both the Zacks Consensus Estimate of a loss of $1.64 and the year-ago loss of $1.02.
Ophthotech does not have any approved product in its portfolio yet. The company’s top line solely comprises collaboration revenues earned through its licensing and commercialization agreement with Novartis.
Collaboration revenues increased 11.3% year over year to $5.3 million, primarily due to a rise in drug shipment to Novartis. Reported revenues, however, missed the Zacks Consensus Estimate of $6.3 million.
Quarter in Detail
Research and development expenses increased 75.2% to $59.4 million, mainly due to costs related to the phase III program on Fovista.
General and administrative expenses increased 7.4% from the year-ago period to $13 million due to higher costs to support the company's expanded operations and additional staffing.
2016 Results
Full-year sales dipped 1.2% year over year to $50.9 million. Sales missed the Zacks Consensus Estimate of $51.5 million.
The full-year loss of $5.45 per share was wider than the Zacks Consensus Estimate of a loss of $5.24. The company had incurred a loss of $3.06 per share a year ago.
Strategic & Restructuring Initiatives
In Dec 2016, Ophthotech along with Novartis, announced disappointing results from two pivotal phase III studies – OPH1002 and OPH1003 – evaluating Fovista, in combination with Lucentis, for the treatment of wet AMD. Data revealed that both the studies failed to meet the primary endpoint of a mean change in best corrected visual acuity from baseline at 12 months. At the fourth-quarter conference call, the company said that further analyses of the data failed to demonstrate any clinically meaningful benefit for any subgroup of patients. They have stopped treating patients and terminated the OPH1002 and OPH1003 trials as well as the Fovista expansion study.
Following this, Ophthotech announced that it has initiated a strategic review plan. It will also cut its workforce by 80%, immediately terminate and wind down Fovista OPH1002 and OPH1003 studies and end Fovista phase II expansion study and cancel Fovista manufacturing commitments. These decisions are expected to be largely completed by the second quarter of 2017.
At the call, the company said that it will reassess the Fovista and Zimura development programs in 2017 and may modify, expand or terminate some or all of these development programs as a result of the same. While the final decision for Fovista will depend on the top-line results of the OPH1004 study (Fovista in combination with Eylea or Avastin – data expected in second half of 2017) that of Zimura development program will depend on the results of a competitor Roche's phase III studies on ophthalmology candidate, lampalizumab in dry AMD (data expected in the second half of 2017). The company will also review the scientific rationale for studying Fovista and Zimura in one or new ophthalmic indications.
At the end of 2016, the company had cash, cash equivalents and available-for-sale securities of $289.3 million. Of this, approximately $100–$115 million will be spent for workforce reductions, terminating facility leases; terminating and winding down Fovista OPH1002 and OPH1003 studies and ending Fovista expansion study, completing Fovista OPH1004 study and canceling Fovista manufacturing commitment.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter. In the past month, the consensus estimate also shifted upward by 13.4% due to these changes.
Ophthotech Corporation Price and Consensus
Ophthotech Corporation Price and Consensus | Ophthotech Corporation Quote
VGM Scores
At this time, Ophthotech's stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been trending upward for the stock. The magnitude of this revision also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.