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Loss Widens at Achillion

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The share price of Achillion Pharmaceuticals, Inc. (ACHN - Free Report) fell 6.7% after the company announced its first quarter results on Mar 7. Since then, share prices have however recovered 3.3%.
Achillion reported a first quarter 2014 loss of 17 cents per share, in line with the Zacks Consensus Estimate but wider than the loss of 14 cents recorded in the first quarter of 2013.
Achillion did not record any revenues in the first quarter 2014 and so was the case in first quarter 2013.
Quarter in Detail
In the first quarter of 2014, general and administrative expenses increased 10.4% to $3.4 million due to higher salaries, non-cash stock based compensation and increased insurance costs. Research and development (R&D) expenses increased 47.3% year over year to $12.8 million, reflecting higher investment in pipeline.
Achillion primarily focuses on developing therapies for hepatitis C virus (HCV) infection. The company has initiated several studies on its HCV candidates including ACH-3102 (phase II), ACH-3422 (phase I) and ACH-2684 (phase II).
The U.S. Food and Drug Administration (FDA) has placed a clinical hold on sovaprevir. The FDA had placed a clinical hold on sovaprevir after observing elevations in liver enzymes in a phase I study. The company expects to receive a response from the FDA on sovaprevir during the second quarter of 2014.
We believe that in the near term investor focus will be on Achillion’s HCV pipeline candidates. However, we note that HCV represents a highly crowded market. Moreover, many large cap companies including Bristol-Myers Squibb Company (BMY - Free Report) , AbbVie Inc. (ABBV - Free Report) and Gilead Sciences Inc. (GILD - Free Report) are developing drugs for the treatment of HCV.
Achillion carries a Zacks Rank #4 (Sell). Investors looking for better-ranked stocks may consider companies like Gilead carrying a Zacks Rank #1 (Strong Buy).

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