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Mirati (MRTX) Q1 Loss Wider Than Expected, Sales Beat

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Mirati Therapeutics (MRTX - Free Report) reported first-quarter 2022 loss of $3.40 per share, wider than the Zacks Consensus Estimate of a loss of $3.37 as well as the year-ago loss of $2.67.

Mirati reported $0.7 million as collaboration revenues for the first quarter, beating the Zacks Consensus Estimate of nil revenues. Management did not record any revenues in the year-ago quarter.

In the year so far, the stock price of Mirati has plunged 56.4% compared with the industry’s decline of 20.1%.

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Quarter in Detail

Research and development expenses rose 25.9% from the prior-year quarter’s level to $131.0 million due to an increase in development expenses of its pipeline candidates, preclinical and early discovery activities plus higher employee-related expenses.

General and administrative expenses rose 90.3% from the year-ago quarter’s level to $54.0 million due to increased professional services expenses and higher employee-related costs in the quarter.

Cash, cash equivalents and short-term investments as of Mar 31, 2022, were $1.3 billion compared with $1.5 billion as of Dec 31, 2021.

Pipeline Update

Earlier in February this year, Mirati announced that the FDA accepted the new drug application (NDA) of Mirati, seeking approval for adagrasib, its KRAS inhibitor drug, for previously-treated KRASG12C-mutated non-small cell lung cancer (NSCLC). A decision by the regulatory agency is expected by Dec 14, 2022.

The NDA submission was based on the phase II registration-enabling cohort of the KRYSTAL-1 study on adagrasib and was filed under the FDA's real-time oncology review pilot program. The KRYSTAL-1 study is evaluating adagrasib in multiple cohorts in combination with other therapies. These include a combination of adagrasib with Merck’s (MRK - Free Report) Keytruda for first-line NSCLC, a combination of adagrasib plus Boehringer Ingelheim’s Gilotrif (afatinib) for advanced NSCLC and adagrasib combined with Bristol-Myers’ (BMY - Free Report) Erbitux for second-line colorectal cancer (CRC).

Preliminary data from the adagrasib plus Merck’s Keytruda cohort demonstrated that the combination achieved a 100% disease control rate, with all seven patients exhibiting tumor regression ranging from 37% to 92% as of Oct 21, 2021.

Mirati is also pursuing a broad combination development program for adagrasib beyond the combinations with Merck’s Keytruda and Bristol-Myers’ Erbitux. These include combinations with SHP2, SOS1 or CDK 4/6 inhibitors.

Another pipeline candidate, sitravatinib, is being evaluated in a pivotal phase III study (SAPPHIRE) combined with Bristol-Myers’ Opdivo for second-line or third-line non-squamous NSCLC. Data from the study is expected in the fourth quarter of 2022. If the outcome turns out to be positive, it could be the basis of regulatory submissions for sitravatinib in the United States and Europe.

MRTX initiated a phase I/II study during first-quarter 2022 to evaluate its PRMT5 inhibitor candidate MRTX1719 as a potential treatment of methylthioadenosine phosphoylase (MTAP)-deleted cancers. Initial data from the study is expected in 2023.

Mirati also plans to file two investigational new drug (IND) applications in second-half 2022 for MRTX1133, a KRAS G12D inhibitor, and MRTX0902, anSOS1 inhibitor.

Zacks Rank & Stock to Consider

Mirati currently has a Zacks Rank #4 (Sell).

A better-ranked stock in the biotech sector is Alkermes (ALKS - Free Report) , which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkermes’ loss per share estimates for 2022 have narrowed from 14 cents to 3 cents in the past 30 days. Shares of ALKS have risen 24.5% in the year-to-date period.

Earnings of Alkermes beat estimates in each of the last four quarters, the average being 350.5%. In the last reported quarter, Alkermes delivered an earnings surprise of 1,100%.