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Epizyme (EPZM) Down 3.4% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Epizyme (EPZM - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.

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

Epizyme's Q3 Loss Narrower Than Expected, Sales Miss

Epizyme incurred a loss of 55 cents per share in third-quarter 2020, which was narrower than the Zacks Consensus Estimate of a loss of 61 cents but wider than the year-ago loss of 40 cents.

Total revenues for the third quarter of 2020 were $3.6 million, which missed the Zacks Consensus Estimate of $6 million and down from the year-ago revenues of $5.7 million.

Quarter in Detail

Tazverik became commercially available to patients on Feb 1, 2020, following its accelerated approval in January for the treatment of metastatic or locally advanced Epithelioid Sarcoma (ES).

Tazverik generated net product revenues in both ES and FL of $3.4 million in the third quarter, with growth largely driven by the FDA approval of the drug in relapsed or refractory FL on Jun 18, 2020. However, during the third quarter, the COVID-19 pandemic continued to negatively impact FL patient visits to physicians, new patient starts across all lines of treatment and the ability of Epizyme’s field-based teams to fully access FL prescribers.

Collaboration revenues in third-quarter 2020, earned as part of the company’s alliance with Boehringer Ingelheim, were $0.1 million.

Research and development expenses decreased to $23.5 million from $25.3 million in the year-ago quarter.

SG&A expenses increased to $26.2 million from $14.5 million.

Epizyme had $279.9 million of cash, cash equivalents and marketable securities as of September 30 compared with $322.1 million as of Jun 20. Epizyme and Pharmakon Advisors, an affiliate of Royalty Pharma, expanded their original loan agreement established in November 2019, enabling Epizyme to draw down an additional $150 million from the loan facility, subject to customary closing conditions. The company expects its existing cash, cash equivalents and marketable securities combined with the proceeds from the loan facility to fund its operations until at least 2023.

Pipeline Update

Epizyme completed enrollment in the safety run-in portion of its combination study of Tazverik in metastatic castration-resistant prostate cancer (mCRPC) and the initiation of the efficacy expansion stage is planned for early 2021. The company expects to report safety and efficacy data from the safety run-in portion of the study at a medical meeting in 2021.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 12.73% due to these changes.

VGM Scores

At this time, Epizyme 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 broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Epizyme has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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