Revs Rise at Immunomedics in Q4

Immunomedics Inc.’s (IMMU - Snapshot Report) fourth quarter fiscal 2011 (ended June 30) earnings of $0.03 surpassed the year-ago earnings of $0.01. The Zacks Consensus Estimate hinted at a loss of $0.06. Earnings in the quarter were boosted by higher revenues.

Quarterly Results

Revenues in the final quarter of fiscal 2011 came in at $11.1 million compared to the year-ago figure of $6.1 million. Revenues blew past the Zacks Consensus Estimate of $3 million.

The year-over-year jump was primarily attributable to the receipt of a $10.0 million milestone payment from partner Nycomed for the development of veltuzumab in the rheumatoid arthritis indication. Immunomedics received $5 million from Nycomed in the year-ago quarter.

Revenues from product sales at Immunomedics climbed approximately 81% to $0.9 million in the final quarter of  fiscal 2011. Revenues from research and development accounted for the balance.

The rise in revenues was partially mitigated by higher research and development (R&D) expenses. The increase in R&D expenses in the final quarter of fiscal 2011 was attributable to lower expense reimbursements under the partnership with Nycomed coupled with increased clinical trial expenses.

Annual Results

For fiscal 2011, Immunomedics suffered a loss of $0.20 per share as opposed to the earnings of $0.49 in fiscal 2010. The Zacks Consensus loss estimate for fiscal 2011 was $0.28. The loss suffered by the company in fiscal 2011 was attributable to a massive fall in revenues.

Revenues in fiscal 2011 plummeted 76% to $14.7 million. The decline was attributable to the absence of upfront license fee revenues from Immunomedics’ agreements with UCB (UCBJF) and Nycomed. Fiscal 2010 revenues included $31.1 million and $14.5 million as upfront payments from UCB and Nycomed respectively. The Zacks Consensus Estimate for fiscal 2011 was $7 million.

Moreover, increased R&D expenses also contributed to the loss suffered by Immunomedics in fiscal 2011.

Our Recommendation

We currently have a Neutral recommendation on Immunomedics. The stock carries a Zacks #3 Rank (Neutral rating) in the short-run.

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