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Prothena (PRTA) Q3 Earnings Miss, Pipeline Progress in Focus

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Clinical-stage company, Prothena Corporation (PRTA - Free Report) reported earnings of $2.13 per share, missing the Zacks Consensus Estimate of $2.25. In the year-ago quarter, the company reported a loss of 77 cents.

Total revenues came in at $139.2 million in the quarter, missing the Zacks Consensus Estimate of $140 million. Revenues in the third quarter included collaboration revenues of $78.5 million from Bristol Meyer Squibb (BMY - Free Report) for the option exercise and U.S. license for PRX005 and intellectual property revenues of $60.7 million from the sale of the intellectual property and related rights to its ATTR amyloidosis business and pipeline to Novo Nordisk (NVO - Free Report) .  In the year-ago quarter, the company earned revenues of $157,000.

The company’s shares have surged 369.9% in the year so far against the industry’s decline of 6.8%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Quarter in Detail

R&D expenses were $18 million, down from $21.6 million in the year-ago quarter, primarily due to lower manufacturing costs primarily related to PRX005 and birtamimab programs.

General and administrative (G&A) expenses were $11.9 million, up from $9.4 million in the year-ago quarter, primarily due to higher personnel and legal expenses and increased expenses for the directors’ and officers’ insurance premium.

As of Sep 30, 2021, Prothena had $601.5 million in cash, cash equivalents and restricted cash, and no debt.

Pipeline Updates

The company is evaluating prasinezumab in collaboration with Roche (RHHBY - Free Report) for the treatment of Parkinson’s disease.

It is also evaluating birtamimab, a potential treatment for AL amyloidosis. A confirmatory phase III AFFIRM-AL study of birtamimab in Mayo Stage IV patients with AL amyloidosis is ongoing. 

Novo Nordisk has acquired its clinical-stage antibody, PRX004, and broader ATTR amyloidosis program. Prothena is eligible to receive a total aggregate of up to $1.23 billion and has received $60 million upfront payment from the former to date.

Meanwhile, it is advancing an early-stage pipeline of programs for a number of potential neurological indications with Bristol Meyer.  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, progressive supranuclear palsy, chronic traumatic encephalopathy, and other tauopathies. The company has received $80 million option payment from Bristol Myers for the execution of U.S. license agreement.

Prothena is also evaluating PRX012, an investigational high-potency monoclonal antibody targeting a key epitope at the N-terminus of amyloid beta (Aβ) for the treatment of AD.  An investigational new drug application (IND) is expected in the first quarter of 2022.

The company is also developing a dual Aβ-Tau vaccine — a potential prevention and treatment for AD — to target key epitopes within Aβ and tau proteins for promoting amyloid clearance as well as blockade pathogenic tau interaction. An IND for the vaccine is anticipated in 2023.

Prothena Corporation plc Price, Consensus and EPS Surprise

Prothena Corporation plc Price, Consensus and EPS Surprise

Prothena Corporation plc price-consensus-eps-surprise-chart | Prothena Corporation plc Quote

Our Take

While the company missed on earnings and revenues in the third quarter, the progress with its AD candidates is impressive and promises potential.

Prothena currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.