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Epizyme (EPZM) Incurs Narrower-than-Expected Loss in Q1

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Epizyme, Inc. reported a loss of 56 cents per share in the first quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 63 cents but wider than the year-ago loss of 41 cents.

 

Epizyme’s share price decreased around 7% on Monday. However, the stock has gained 26.1% so far this year outperforming the Zacks classified Medical-Biomedical/Genetics industry, which gained 4% in the same period.

Quarter in Detail

With no approved products in its portfolio as of yet, Epizyme relies heavily on its collaborators for revenues. In this quarter, the company didn’t receive any revenues from its collaborations against $0.5 million received in the year-ago quarter. The company also missed the Zacks Consensus Estimate of $0.49 million.

Research and development (R&D) expenses increased 39.5% year over year to $24.7 million. The increase was primarily due to the expansion of clinical studies of tazemetostat in several indications and initiation of advance phases in other pipeline candidates.

General and administrative (G&A) expenses were $8.3 million in the quarter, up 43.1% from the year-ago quarter. The increase was due to a rise in expenses related to pre-commercial, intellectual property, business development and product planning.

The company had $211.2 million of cash, cash equivalents and marketable securities as of Mar 31, 2017 and expects that it will be sufficient to fund its planned operations at least till the third quarter of 2018.

Pipeline Update

Epizyme continues to advance its lead candidate, tazemetostat in multiple clinical trials in a range of solid tumors and hematological malignancies, and as both a monotherapy and in combination with other anti-cancer agents. The company has collaborated with Roche Holding AG (RHHBY - Free Report) to evaluate tazemetostat in combination with Tecentriq.

In Jan 2017, Epizyme completed enrolment in all wild type EZH2 cohorts of phase II study of tazemetostat for the treatment of patients with relapsed or refractory follicular lymphoma (FL) and diffuse large B-cell lymphoma (DLBCL). Interim data from this study is expected in June. Later this week, the company will provide interim data from another phase II study for the treatment of molecularly defined solid tumors indication.

In Mar 2017, the company initiated a separate study to evaluate tazemetostat in combination with prednisolone in relapsed or refractory patients with DLBCL.

Subsequent to the quarter, in April, tazemetostat was granted fast track designation by the FDA for the treatment of patients with relapsed or refractory FL, including all wild type EZH2 or EZH2 activating mutations. As part of an out licensing agreement, Epizyme received a $10 million payment from partner GlaxoSmithKline plc (GSK - Free Report) for the initiation of GLP toxicology studies for a first-in-class methyltransferase inhibitor by the latter.

Epizyme, Inc. Price, Consensus and EPS Surprise

Epizyme, Inc. Price, Consensus and EPS Surprise | Epizyme, Inc. Quote

Zacks Rank & Stock to Consider

Epizyme currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is BioTime, Inc. , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BioTime’s loss estimates have narrowed 60.9% over the last 60 days to 18 cents for 2017. The company posted a positive earnings surprise in two of the four trailing quarters with an average beat of 12.32%. Its shares have increased 6.9% in the last one year.

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