It has been about a month since the last earnings report for Epizyme, Inc. . Shares have lost about 3.6% 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.
Epizyme Reports Narrower-than-Expected Loss
Epizyme reported a loss of $0.60 per share in the fourth quarter of 2016, narrower than the Zacks Consensus Estimate of $0.64 but wider than the year-ago loss of $0.53.
Quarter in Detail
The company earned collaboration revenues of $0.5 million in the quarter compared to the year-ago tally of $0.6 million and fell short of the Zacks Consensus Estimate of $0.6 million.
Research and development (R&D) expenses were $28.4 million, up from $16.8 million in the year-ago quarter due to costs associated with the expansion of the tazemetostat program. Likewise, general and administrative expenses were up 26.7% to $7.6 million primarily due to higher compensation-related expenses associated with expansion of the senior leadership team in the first half of 2016 to support operational growth, as well as increased investment in business development activities and tazemetostat-related pre-commercial activities.
2016 Results
Revenues came in at $8.0 million, up from $2.6 million in 2015 but fell short of the Zacks Consensus Estimate of $8.1 million. The increased sales was due to the recognition of the $6.0 million milestone earned upon GlaxoSmithKline’s initiation of patient dosing in a phase I clinical trial of GSK3326595, a PRMT5 inhibitor invented by Epizyme and licensed to Glaxo.
Pipeline Update
Epizyme's lead pipeline candidate, tazemetostat, is currently being evaluated in a phase II study in adults with relapsed or refractory non-Hodgkin lymphoma (NHL) and continues to enroll patients. Efficacy and safety data from the phase II studies on NHL and solid tumor are expected in the first half of 2017. Epizyme expects to file regulatory approval in mid-2017.
Epizyme has initiated a clinical study on tazemetostat in combination with prednisolone in relapsed/refractory patients with diffuse large B cell lymphoma (DLBCL). This combination regimen is being conducted as the sixth cohort to the ongoing phase II NHL study. The company intends to initiate new combination study in patients with follicular lymphoma in 2017.
Epizyme has completed enrollment in three of the five cohorts of its ongoing phase II study of tazemetostat in patients with relapsed/refractory NHL; the two cohorts enrolling patients with DLBCL with wild-type EZH2 and a third enrolling patients with follicular lymphoma with wild-type EZH2.
In Jan 2017, Epizyme opened enrollment to patients with follicular lymphoma in the U.S. as part of its phase II study in NHL as per FDA’s request.
Guidance
Epizyme expects that its cash balance of $242.2 million as of Dec 31, 2016 will be used to fund its planned operations through at least the third quarter of 2018.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter.
VGM Scores
At this time, Epizyme's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'D'. Following the exact same course, the stock was allocated 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
While estimates have been broadly trending downward for the stock, the magnitude of this revision has been net zero. 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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Why Is Epizyme (EPZM) Down 3.6% Since the Last Earnings Report?
It has been about a month since the last earnings report for Epizyme, Inc. . Shares have lost about 3.6% 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.
Epizyme Reports Narrower-than-Expected Loss
Epizyme reported a loss of $0.60 per share in the fourth quarter of 2016, narrower than the Zacks Consensus Estimate of $0.64 but wider than the year-ago loss of $0.53.
Quarter in Detail
The company earned collaboration revenues of $0.5 million in the quarter compared to the year-ago tally of $0.6 million and fell short of the Zacks Consensus Estimate of $0.6 million.
Research and development (R&D) expenses were $28.4 million, up from $16.8 million in the year-ago quarter due to costs associated with the expansion of the tazemetostat program. Likewise, general and administrative expenses were up 26.7% to $7.6 million primarily due to higher compensation-related expenses associated with expansion of the senior leadership team in the first half of 2016 to support operational growth, as well as increased investment in business development activities and tazemetostat-related pre-commercial activities.
2016 Results
Revenues came in at $8.0 million, up from $2.6 million in 2015 but fell short of the Zacks Consensus Estimate of $8.1 million. The increased sales was due to the recognition of the $6.0 million milestone earned upon GlaxoSmithKline’s initiation of patient dosing in a phase I clinical trial of GSK3326595, a PRMT5 inhibitor invented by Epizyme and licensed to Glaxo.
Pipeline Update
Epizyme's lead pipeline candidate, tazemetostat, is currently being evaluated in a phase II study in adults with relapsed or refractory non-Hodgkin lymphoma (NHL) and continues to enroll patients. Efficacy and safety data from the phase II studies on NHL and solid tumor are expected in the first half of 2017. Epizyme expects to file regulatory approval in mid-2017.
Epizyme has initiated a clinical study on tazemetostat in combination with prednisolone in relapsed/refractory patients with diffuse large B cell lymphoma (DLBCL). This combination regimen is being conducted as the sixth cohort to the ongoing phase II NHL study. The company intends to initiate new combination study in patients with follicular lymphoma in 2017.
Epizyme has completed enrollment in three of the five cohorts of its ongoing phase II study of tazemetostat in patients with relapsed/refractory NHL; the two cohorts enrolling patients with DLBCL with wild-type EZH2 and a third enrolling patients with follicular lymphoma with wild-type EZH2.
In Jan 2017, Epizyme opened enrollment to patients with follicular lymphoma in the U.S. as part of its phase II study in NHL as per FDA’s request.
Guidance
Epizyme expects that its cash balance of $242.2 million as of Dec 31, 2016 will be used to fund its planned operations through at least the third quarter of 2018.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter.
Epizyme, Inc. Price and Consensus
Epizyme, Inc. Price and Consensus | Epizyme, Inc. Quote
VGM Scores
At this time, Epizyme's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'D'. Following the exact same course, the stock was allocated 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
While estimates have been broadly trending downward for the stock, the magnitude of this revision has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.