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Prothena (PRTA) Up 78.2% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Prothena (PRTA - Free Report) . Shares have added about 78.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Prothena due for a pullback? 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.

Prothena Q1 Loss Wider Than Expected, Pipeline in Focus

Prothena Corporation reported a loss of 91 cents per share, wider than the Zacks Consensus Estimate of a loss of 80 cents and the year-ago quarter’s loss of 59 cents.

Revenues mainly came from the company’s collaboration with Roche. Quarterly revenues came in at $160,000, missing the Zacks Consensus Estimate by 3.03%. Revenues were up from $141,000 in the year-ago quarter.

Quarter in Detail

R&D expenses were $21.1 million, up from $15.2 million in the year-ago quarter, primarily due to higher R&D consulting expenses, increased personnel expenses and elevated manufacturing expenses primarily related to the PRX012 and birtamimab programs.

General and administrative (G&A) expenses came in at $11.1 million, up from $9.7 million in the year-ago quarter, primarily due to higher personnel expenses and increased expenses for the directors’ and officers’ insurance premium.

As of Mar 31, 2021, Prothena had $3457.7 million in cash, cash equivalents and restricted cash, and no debt.

Pipeline Updates

The company is evaluating prasinezumab in collaboration with Roche for the treatment of Parkinson’s disease. Prothena earned a $60-million milestone with the first patient dosed in the PADOVA study in the second quarter.

Prothena announced plans in February 2021 to advance birtamimab, a potential treatment for AL amyloidosis, to the confirmatory phase III AFFIRM-AL study in Mayo Stage IV patients with AL amyloidosis. The decision was based on the significant survival benefit favoring birtamimab, from the previous VITAL study in a subset of patients categorized as Mayo Stage IV at baseline and multiple in-depth discussions with the FDA.

Prothena reported encouraging results from the phase I study of PRX004, a potential treatment for ATTR amyloidosis.

Meanwhile, the company is advancing an early-stage pipeline of programs for a number of potential neurological indications with Bristol-Myers Squibb.  PRX005, a potential treatment for Alzheimer’s disease (AD), is an investigational antibody that targets tau, a protein implicated in diseases including AD, frontotemporal dementia (FTD), progressive supranuclear palsy (PSP), chronic traumatic encephalopathy (CTE) and other tauopathies.

PRX005 demonstrated significant inhibition of cell-to-cell transmission and neuronal internalization in vitro and in vivo, and slowed pathological progression in a tau transgenic mouse model. An Investigational New Drug Application (IND) is expected by the third quarter of 2021.



 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, Prothena has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, 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, Prothena has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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