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Aerie (AERI) Posts Wider-Than-Expected Q1 Loss, Expenses Up
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Aerie Pharmaceuticals, Inc. posted first-quarter 2017 loss of 76 cents per share (including stock-based compensation), wider than the Zacks Consensus Estimate of a loss of 74 cents but narrower than the year-ago loss of 85 cents.
Being a development-stage company, Aerie has not generated any revenues from product sales yet.
We note that Aerie outperformed the Zacks classified Medical Drugs industry in the last six months. In fact, the stock rallied 25.9% during this period, compared with a gain of 13.8% for the industry.
Quarter in Detail
In the reported quarter, research and development expenses declined 11% to $9.8 million as the company completed trials in the U.S. General and administrative expenses increased 47.7% to $14.5 million. The higher operating expenses in the reported quarter were due to expansion of the employee base to support the growth of operations and commercialization preparatory activities, including commercial manufacturing costs for Rhopressa.
Pipeline Update
The company resubmitted new drug application (NDA) for lead candidate Rhopressa 0.02% on Feb 28 and expects a review period of 12 months. We note that Aerie withdrew the Rhopressa NDA filed in September as a third party manufacturing facility in Tampa, FL was not ready for pre-approval inspection by the FDA. The company initiated preparations to bring a second contract manufacturer online in 2018.
The company reported encouraging six-month top-line safety and efficacy results from the phase III trial, ROCKET 4, on Rhopressa. The trial is being conducted to provide adequate safety data for European regulatory filings. Rocket-4 has been successfully completed for submission to the European regulatory authorities.
Apart from Rhopressa, Aerie is evaluating Roclatan, a once-daily, quadruple-action fixed-dose combination of Rhopressa and Pfizer’s (PFE - Free Report) Xalatan. The company expects top-line 90-day efficacy and safety data from the second phase III clinical trial, Mercury 2, for Roclatan 0.02%/0.005%, in second-quarter 2017. Data from Mercury 1 is expected in third-quarter 2017. If Mercury 1 and Mercury 2 are successful, the NDA for Roclatan is expected to be filed in late 2017 or early 2018.
The company also expects to commence a trial, Mercury 3, in mid-2017, in Europe to support filings there. The trial will be a non-inferiority trial comparing Roclatan to prescribed fixed dose combination of Ganfort (a combination of the bimatoprost along with timolol), marketed by Allergan in Europe.
Our Take
The wider-than-expected loss in the first quarter was disappointing. Nevertheless, we are encouraged by the company's efforts in developing its pipeline candidates. With a number of upcoming data readouts lined up for the upcoming quarters, we expect investors to remain focused on further updates by the company.
Zacks Rank & Key Pick
Aerie currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the healthcare sector is Infinity Pharmaceuticals, Inc. which currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Infinity’ loss estimates narrowed to $1.03 from $1.43 for 2017 over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 36.64%.Its share price increased 43.7% year to date.
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Aerie (AERI) Posts Wider-Than-Expected Q1 Loss, Expenses Up
Aerie Pharmaceuticals, Inc. posted first-quarter 2017 loss of 76 cents per share (including stock-based compensation), wider than the Zacks Consensus Estimate of a loss of 74 cents but narrower than the year-ago loss of 85 cents.
Being a development-stage company, Aerie has not generated any revenues from product sales yet.
We note that Aerie outperformed the Zacks classified Medical Drugs industry in the last six months. In fact, the stock rallied 25.9% during this period, compared with a gain of 13.8% for the industry.
Quarter in Detail
In the reported quarter, research and development expenses declined 11% to $9.8 million as the company completed trials in the U.S. General and administrative expenses increased 47.7% to $14.5 million. The higher operating expenses in the reported quarter were due to expansion of the employee base to support the growth of operations and commercialization preparatory activities, including commercial manufacturing costs for Rhopressa.
Pipeline Update
The company resubmitted new drug application (NDA) for lead candidate Rhopressa 0.02% on Feb 28 and expects a review period of 12 months. We note that Aerie withdrew the Rhopressa NDA filed in September as a third party manufacturing facility in Tampa, FL was not ready for pre-approval inspection by the FDA. The company initiated preparations to bring a second contract manufacturer online in 2018.
The company reported encouraging six-month top-line safety and efficacy results from the phase III trial, ROCKET 4, on Rhopressa. The trial is being conducted to provide adequate safety data for European regulatory filings. Rocket-4 has been successfully completed for submission to the European regulatory authorities.
Apart from Rhopressa, Aerie is evaluating Roclatan, a once-daily, quadruple-action fixed-dose combination of Rhopressa and Pfizer’s (PFE - Free Report) Xalatan. The company expects top-line 90-day efficacy and safety data from the second phase III clinical trial, Mercury 2, for Roclatan 0.02%/0.005%, in second-quarter 2017. Data from Mercury 1 is expected in third-quarter 2017. If Mercury 1 and Mercury 2 are successful, the NDA for Roclatan is expected to be filed in late 2017 or early 2018.
The company also expects to commence a trial, Mercury 3, in mid-2017, in Europe to support filings there. The trial will be a non-inferiority trial comparing Roclatan to prescribed fixed dose combination of Ganfort (a combination of the bimatoprost along with timolol), marketed by Allergan in Europe.
Our Take
The wider-than-expected loss in the first quarter was disappointing. Nevertheless, we are encouraged by the company's efforts in developing its pipeline candidates. With a number of upcoming data readouts lined up for the upcoming quarters, we expect investors to remain focused on further updates by the company.
Zacks Rank & Key Pick
Aerie currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the healthcare sector is Infinity Pharmaceuticals, Inc. which currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Infinity’ loss estimates narrowed to $1.03 from $1.43 for 2017 over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 36.64%.Its share price increased 43.7% year to date.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think. See This Ticker Free >>