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Prothena (PRTA) Earnings Beat in Q3, Pipeline in Focus


Prothena Corporation plc PRTA reported a loss of $1.37 per share in the third quarter of 2017, narrower than the Zacks Consensus Estimate loss of $1.41 but wider than the year-ago loss of $1.26.

Moreover, quarterly revenues came in at $0.3 million, in line with the Zacks Consensus Estimate and the year-ago quarter.

Prothena’s stock has moved up 24% in the year so far compared with the industry’s gain of 4.8%.

Quarter in Detail

R&D expenses were $41.3 million, up 53.9% year over year primarily due to higher product manufacturing costs, and lower personnel and clinical trial costs.

General and administrative expenses were $12.4 million, down 22.9% year over year.

2017 Outlook

Prothena projects net cash burn from operating and investing activities in the range of $142-$152 million, a decrease of $18 million based on savings related to the decision not to advance PRX003 and other favorability from development, manufacturing and taxes. The company expects to end 2017 with approximately $409 million in cash, cash equivalents and restricted cash (midpoint).

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. Enrolment has been completed in the VITAL study.

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 enrolment 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 Holdings RHHBY for the treatment of Parkinson’s disease and other related synucleinopathies. The company initiated a phase II study, PASADENA, on PRX002 in patients suffering from Parkinson`s disease which triggered a $30-million milestone payment from Roche to Prothena. The study is continuing enrolment.

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 mid-2018.

Prothena announced results from a phase Ib multiple ascending dose (MAD) study of pipeline candidate, PRX003 in psoriasis patients. The primary objectives of the study were achieved. However, advancing PRX003 into mid-stage clinical development required a well-defined relationship between biological activity and meaningful clinical effects and these prerequisites were not met.

As a result of failed data on PRX003, Prothena will focus on advancing NEOD001 (phase IIb and phase III), PRX002 (phase II) and PRX004 (expected to enter phase I by mid-2018).

Our Take

The narrower-than-expected loss in the third quarter was encouraging. 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 #3 (Hold).

A couple of better-ranked health care stocks in the same space include Ligand Pharmaceuticals Incorporated LGND and Agenus Inc. AGEN. While Ligand sports a Zacks Rank #1 (Strong Buy) while Agenus carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up $3.68 to $3.70 for 2018 over the last 30 days. The company pulled off positive earnings surprises in two of the trailing four quarters, with an average beat of 6.19%.

Agenus’ loss per share estimates have narrowed from $1.40 to $1.36 for 2018 over the last 30 days. The company delivered positive earnings surprises in three of the trailing four quarters, with an average beat of 4.27%.

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