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Why Is Acceleron (XLRN) Down 15.1% Since Last Earnings Report?

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A month has gone by since the last earnings report for Acceleron Pharma (XLRN - Free Report) . Shares have lost about 15.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Acceleron 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 catalysts.

Acceleron Reports Narrower-Than-Expected Q2 Loss

Acceleron reported a loss of 34 cents in the second quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of 55 cents but in line with the year-ago quarter’s reported figure. The year-over-year growth in revenues was offset by increased operating expenses.

The company reported collaboration revenues of $39.7 million in the reported quarter, increasing from $27.7 million in the year-ago quarter and beating the Zacks Consensus Estimate of $32 million.

Total revenues reported in the quarter include $11.1 million in royalty revenues from approximately $55.0 million of net U.S. sales of Reblozyl (luspatercept-aamt) and the recognition of a $25.0-million regulatory-based milestone for the approval of Reblozyl in Europe.

In November 2019, the FDA approved Reblozyl for the treatment of anemia in adult patients with beta-thalassemia, who require regular red blood cell or RBC transfusions.

Research and development costs increased to $38.2 million from $34.8 million in the year-ago quarter. Selling, general and administrative costs too increased to $20.4 million from $14 million in the year-ago quarter.

Cash, cash equivalents and investments as of Jun 30, 2020, were $389.8 million, down from $453.8 million at December-end. Based on its current operating plans and projections, Acceleron believes that current cash, cash equivalents and investments will be sufficient to fund projected operating requirements for the foreseeable future as it expects to receive significant royalty revenues from Reblozyl sales.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 31.31% due to these changes.

VGM Scores

Currently, Acceleron has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. 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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Acceleron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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