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Aduro (ADRO) Q1 Loss Narrower Than Expected, Revenues Beat

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Aduro Biotech, Inc. incurred first-quarter 2018 loss of 28 cents per share, narrower than both the Zacks Consensus Estimate of a loss of 30 cents and the year-ago loss of 32 cents.

Quarterly revenues soared substantially 73.7% year over year to $6.6 million. This upside can mainly be attributed to a receipt of $3 million milestone payment from Merck (MRK - Free Report) under Aduro’s worldwide licensing agreement with the company for initiation of a phase I study, evaluating its own anti-CD27 antibody in combination with Merck’s Keytruda (pembrolizumab)for treatment of adults with advanced solid tumors. The top line also surpassed the Zacks Consensus Estimate of $4 million.

Shares of Aduro increased more than 3% on May 2 in after-hours trading following the earnings release. However, the stock has underperformed the industry in a year’s time, having declined 26.1% compared with the industry’s decrease of 14.3%.

 

Research and development expenses slightly dipped 2.4% in the reported quarter to $20.1 million, mainly owing to lower contract manufacturing expense of $3.1 million. This is primarily related to the company’s pipeline candidate, BION-1301, currently under development for treating adults with relapsed or refractory multiple myeloma. However, this was offset by an increase in costs related to manufacturing of B-select antibodies and the company’s personalized neoantigen-based immunotherapy.

General and administrative expenses were $9 million, up 8.4% year over year on higher stock-based compensation expense and legal fees.

Pipeline Update

Aduro has a broad pipeline of novel immunotherapies, developed for treating a variety of cancers.

The company evaluates its STING pathway activator, ADU-S100, in combination with Novartis AG’s (NVS - Free Report) PD-1 checkpoint inhibitor, PDR001, in a phase Ib trial for treating solid tumors and lymphomas. Additionally, the candidate is being evaluated in a phase I trial as a monotherapy in patients with cutaneous accessible metastatic solid tumors or lymphomas. Top-line data from the program is expected soon.

Meanwhile, in December 2017, Aduro initiated a phase I/II dose escalation study, examining its pipeline candidate, BION-1301, for the treatment of adults with relapsed or refractory multiple myeloma.

Aduro Biotech, Inc. Price, Consensus and EPS Surprise

Aduro Biotech, Inc. Price, Consensus and EPS Surprise | Aduro Biotech, Inc. Quote

 

Zacks Rank & Key Picks

Aduro carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Ligand Pharmaceuticals Incorporated , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved north from $4.20 to $4.43 for 2018 in the last 30 days. The company delivered a positive surprise in three of the trailing four quarters with an average beat of 24.88%. Share price of the company has surged 36.9% over a year.

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