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Ophthotech (OPHT) Up 7.1% Since Earnings Report: Can It Continue?

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About a month has gone by since the last earnings report for Ophthotech Corporation . Shares have added about 7.1% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ophthotech Q3 Earnings & Sales Beat, Zimura in Focus

Ophthotech reported earnings of $5.25 per share for the third quarter of 2017, beating the Zacks Consensus Estimate of $4.38. The company had reported a loss of $1.71 in the year-ago quarter.

With no approved products in its portfolio, Ophthotech derives revenues from milestone and other payments under collaborations. The company reported collaboration revenues of $206.7 million in the quarter, beating the Zacks Consensus Estimate of $185 million and higher than $1.7 million in the year-ago period.

The significant year-over-year increase in revenues is mainly attributed to recognition of deferred revenues related to completion of deliverables required under its licensing and commercialization agreement with Novartis.

Quarter in Detail

Research and development expenses decreased 79% to $10.7 million, mainly due to lower expenses related to the phase III program on Fovista, which includes a decrease in manufacturing expenses.

General and administrative expenses decreased 40.8% from the year-ago period to $7.1 million due to lower cost related to the company's operations and infrastructure.

With the failure of Fovista in two pivotal phase III studies, the company is focused on Zimura development programs. The company is developing Zimura in dry and wet AMD, and has plans to initiate studies in Stargardt disease, idiopathic choroidal vasculopathy (“IPCV”), and intermediate/posterior uveitis.

Cash Balance

Ophthotech’s cash balance was $180.2 million as of Sep 30, 2017.

The company increased its expectation of cash balance to the range of $155 million to $165 million (previously $145 million to $160 million) by the end of 2017.

How Have Estimates Been Moving Since Then?

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

VGM Scores

At this time, Ophthotech's stock has a nice Growth Score of B, however its Momentum is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is equally suitable for value and momentum investors while also being suitable for those looking for growth.

Outlook

Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.

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