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Prothena (PRTA) Q1 Loss Narrower than Expected, Updates View

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Prothena Corporation plc (PRTA - Free Report) reported a loss of 99 cents per share in the first quarter of 2017, wider than the year-ago loss of 81 cents but narrower than the Zacks Consensus Estimate of $1.32. 

Moreover, quarterly revenues were $0.3 million, roughly flat from the year-ago quarter and in line with the Zacks Consensus Estimate.

 

Prothena’s share price has increased 9.9% in the year so  far, while the Zacks classified Medical-Biomedical and Genetics industry decreased 4.4%.

Quarter in Detail

Research and development (R&D) expenses were $25.7 million, up 25.4% year over year primarily due to increased personnel cost, and higher expenses for product manufacturing and clinical trials.

General and administrative (G&A) expenses were $10.8 million, up 50.8% year over year due to higher personnel costs, consulting expenses and other expenses.

During the quarter, the company raised aggregate net proceeds of $150.3 million through the issuance of 2.7 million ordinary shares in Mar 2017.

2017 Outlook

Prothena expects net cash from operating and investing activities in the range of $160–$170 million. The projected range included an expected milestone payment from Roche Holdings AG (RHHBY - Free Report) upon initiation of the phase II study on PRX002. The company expects to end 2017 with approximately $375 million in cash, cash equivalents and restricted cash (midpoint). The guidance was updated to include the recent $150.3 million from the Mar 2017 public equity offering.

Pipeline Updates

Prothena continues to progress with its pipeline candidates. The company is evaluating its lead candidate NEOD001 in the phase III VITAL Amyloidosis study in newly diagnosed treatment-naïve patients with AL amyloidosis and cardiac dysfunction. Patient enrollment in the VITAL study is expected to be completed by mid-May 2017.

Prothena is also evaluating the candidate in a phase IIb study, PRONTO, in previously treated patients with AL amyloidosis and persistent cardiac dysfunction. The company completed enrollment in this study and top-line results from the study are expected following the 12-month study period in the second quarter of 2018.

Moreover, Prothena is evaluating PRX002, in collaboration with Roche, for the treatment of Parkinson’s disease and other related synucleinopathies. The company expects to initiate a phase II study, PASADENA, in patients suffering from Parkinson`s disease in the second quarter of 2017.

The company expects to report top-line data from a phase Ib multiple ascending dose, proof-of-biology study on PRX003 in patients with psoriasis in the third quarter of 2017.

Alongside, Prothena is also working to advance PRX004 in a phase I study in patients with ATTR amyloidosis. The candidate is expected to enter clinic in 2018.

Our Take

The narrower-than-expected loss in the first quarter was encouraging. Nevertheless, the company’s efforts on developing its pipeline are encouraging. We expect investor focus to remain on further updates from its late-stage candidate, NEOD001.

Zacks Rank & Key Picks

Prothena currently carries a Zacks Rank #4 (Sell). 

Some better-ranked stocks in the health care sector are Infinity Pharmaceuticals, Inc. , Galena Biopharma, Inc. and BioTime, Inc. . While Galena sports a Zacks Rank #1 (Strong Buy), BioTime and Infinity carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Infinity’s loss per share estimates narrowed from $1.43 to $1.03 and from $1.75 to $1.52 for 2017 and 2018, respectively over the last 60 days. The company posted positive earnings surprises in three of the four trailing quarters, with an average beat of 36.64%.

Galena’s loss per share estimates narrowed from $2.03 to 58 cents for 2017 over the last 60 days. The company posted positive earnings surprises in two of the four trailing quarters, with an average beat of 53.83%.

BioTime’s loss per share estimates narrowed 60.9% to 18 cents for 2017 over the last 60 days. The company posted a positive earnings surprise in two of the four trailing quarters with an average beat of 12.32%.

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