XOMA Posts Wider Q1 Loss - Analyst Blog
May 09 2014 - 3:00PM
Zacks
XOMA Corporation’s
(XOMA) shares declined 18.5% after the company reported
wider-than-expected loss per share in the first quarter of 2014 and
slower-than-expected patient enrolment in two phase III studies
being conducted with gevokizumab.
The company posted a loss of 23
cents per share, wider than the Zacks Consensus Estimate of a loss
of 19 cents per share and the year-ago loss of 15 cents per
share.
Total revenues for the reported
quarter were $3.4 million, down 63.9% from the year-ago quarter.
Revenues were lower than the year-ago quarter primarily due to a
milestone payment from Servier. Revenues were well below the Zacks
Consensus Estimate of $9 million.
The Quarter in
Detail
R&D expenses for the quarter
increased 29.5% to $21.5 million. The surge was driven by increased
costs related to pipeline development, including gevokizumab and
higher stock-based compensation expense.
XOMA is working on commencing a
phase III study on gevokizumab for inflammatory pyoderma
gangrenosum (PG). XOMA intends to submit the phase III study
protocols for gevokizumab to the U.S. Food and Drug Administration
(FDA) within the next few weeks. A response from the FDA should be
out by Aug 2014. Gevokizumab received orphan drug status in the
U.S. for the treatment of PG.
Meanwhile, partner Servier is
enrolling patients in the phase III EYEGUARD program on
gevokizumab. EYEGUARD-A is being conducted to evaluate gevokizumab
for the treatment of non-infectious uveitis (NIU), EYEGUARD-B is
evaluating gevokizumab’s ability to prevent disease flares in
patients with Behçet's uveitis and EYEGUARD-C is being conducted to
evaluate gevokizumab for the prevention of disease flares in NIU
patients who are controlled with steroids. Gevokizumab has orphan
drug status for NIU and Behçet's uveitis. However, patient
enrolment for EYEGUARD-A and EYEGUARD-C is going slower than
expected.
Selling, general and administrative
expenses increased 27.4% to $5.3 million.
2014 Guidance
Maintained
XOMA continues to expect cash usage
for operating activities in the range of $55.0 million − $60.0
million in 2014. This includes license and contract-related
revenues that the company expects to receive this year.
XOMA currently carries a Zacks Rank
#3 (Hold). Some better-ranked stocks in the health care sector
include Alexion Pharmaceuticals, Inc. (ALXN),
ANI Pharmaceuticals, Inc. (ANIP) and
Gilead Sciences Inc. (GILD). All these stocks
carry a Zacks Rank #1 (Strong Buy).
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