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Prothena (PRTA) Down 5.8% Since Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Prothena Corporation PLC (PRTA - Free Report) . Shares have lost about 5.8% 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 its most recent earnings report in order to get a better handle on the important drivers.

Prothena Q1 Loss Narrower than Expected, Updates View

Prothena reported a loss of $0.99 per share in the first quarter of 2017, wider than the year-ago loss of $0.81 but narrower than the Zacks Consensus Estimate of $1.32.

Moreover, quarterly revenues were $0.3 million, roughly flat from the year-ago quarter and in line with the Zacks Consensus Estimate.

Quarter in Detail

Research and development (R&D) expenses were $25.7 million, up 25.4% year over year primarily due to increased personnel cost, and higher expenses for product manufacturing and clinical trials.

General and administrative (G&A) expenses were $10.8 million, up 50.8% year over year due to higher personnel costs, consulting expenses and other expenses.

During the quarter, the company raised aggregate net proceeds of $150.3 million through the issuance of 2.7 million ordinary shares in Mar 2017.

2017 Outlook

Prothena expects net cash from operating and investing activities in the range of $160–$170 million. The projected range included an expected milestone payment from Roche upon initiation of the phase II study on PRX002. The company expects to end 2017 with approximately $375 million in cash, cash equivalents and restricted cash (midpoint). The guidance was updated to include the recent $150.3 million from the Mar 2017 public equity offering.

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. Patient enrollment in the VITAL study is expected to be completed by mid-May 2017.

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 enrollment 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, for the treatment of Parkinson’s disease and other related synucleinopathies. The company expects to initiate a phase II study, PASADENA, in patients suffering from Parkinson`s disease in the second quarter of 2017.

The company expects to report top-line data from a phase Ib multiple ascending dose, proof-of-biology study on PRX003 in patients with psoriasis in the third quarter of 2017.

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 2018.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

Prothena Corporation PLC Price and Consensus

 

VGM Scores

At this time, the stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'F' on the value side, putting it in the fifth 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

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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