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Mirati's (MRTX) Stock Rises on Q3 Earnings and Sales Beat

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Mirati Therapeutics reported a loss of $3.09 per share for third-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of $3.46. However, the loss was wider than the year-ago quarter’s loss of $1.55 per share.

Mirati reported $5.43 million as license and collaboration revenues for the third quarter, beating the Zacks Consensus Estimate of $4.72 million. Mirati had recorded revenues of $0.7 million in the year-ago quarter. Third-quarter revenues were driven by a $5 million milestone payment from partner Zai Lab. Adagrasib, Mirati’s lead pipeline candidate, is being developed in China, Hong Kong, Macau and Taiwan in collaboration with Zai Lab.

Mirati’s shares were up 4.3% in response to the better-than-expected results. In the year so far, the stock price of Mirati has plunged 59.5% compared with the industry’s decline of 21.5%.

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Quarter in Detail

Research and development expenses rose 13% from the prior-year quarter’s level to $131.1 million due to higher headcount costs, which offset a decrease in manufacturing costs, following the FDA filing for adagrasib last year.

General and administrative expenses surged 72.7% from the year-ago quarter’s level to $60.8 million due to an increase in commercial readiness costs as the company prepares for a potential product launch for adagrasib in non-small cell lung cancer (NSCLC).

Mirati’s new drug application (NDA), seeking approval for adagrasib, its KRAS inhibitor drug, for previously-treated KRASG12C-mutated NSCLC is under review with the FDA. A decision by the FDA is expected by Dec 14, 2022. A marketing authorization application (MAA) is also under review in Europe. Both the NDA and the MAA are based on data from the phase II registration-enabling cohort of the KRYSTAL-1 study.

Cash, cash equivalents and short-term investments as of Sep 30, 2022 were $1.2 billion, same as at the end of Jun 30, 2022.

Pipeline Update

Mirati is also evaluating adagrasib — both as monotherapy and combinations — in multiple cohorts of phase I/II KRYSTAL-1 study across multiple solid tumors that harbor KRAS G12C mutations. These include a combination of adagrasib with Merck’s (MRK - Free Report) Keytruda in NSCLC, adagrasib plus Boehringer Ingelheim’s Gilotrif (afatinib) in advanced NSCLC and adagrasib with Bristol-Myers’ (BMY - Free Report) Erbitux (cetuximab) in advanced colorectal cancer or CRC.

At ESMO, Mirati presented positive data from a phase 1/2 cohort of the KRYSTAL-1 study evaluating adagrasib with or without Bristol-Myers’ Erbitux in patients with previously treated KRAS G12C mutated CRC.  The combination demonstrated a response rate of 46% and median progression-free survival of 6.9 months.

A phase III registrational study is also ongoing in second-line CRC called KRYSTAL-10, which compares the efficacy of adagrasib in combination with Bristol-Myers’ Erbitux versus standard-of-care chemotherapy.

Top-line interim data from the KRYSTAL-7 study evaluating adagrasib plus Merck’s Keytruda in first-line NSCLC is expected to be released in the fourth quarter.

In the quarter, Mirati entered into a collaboration with Aadi Bioscience to evaluate the combination of adagrasib plus nab-sirolimus, an mTOR inhibitor complexed with human albumin, in KRAS mutant NSCLC and other solid tumors.

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. Interim 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 next year, potentially by mid-2023.

Mirati initiated a phase I study on MRTX0902, a selective SOS1 inhibitor, after the FDA cleared the investigational new drug application for the candidate in August. Mirati plans to file an IND to begin clinical studies on MRTX1133, a KRAS G12D inhibitor, in the fourth quarter of 2022.

Zacks Rank & Stock to Consider

Mirati currently has a Zacks Rank #3 (Hold).

Mirati Therapeutics, Inc. Price, Consensus and EPS Surprise

Mirati Therapeutics, Inc. Price, Consensus and EPS Surprise

Mirati Therapeutics, Inc. price-consensus-eps-surprise-chart | Mirati Therapeutics, Inc. Quote

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

AVEO Pharmaceuticals’ stock has risen 215.4% this year so far. AVEO Pharmaceuticals’ loss estimates for 2022 have narrowed from 94 cents to 76 cents per share over the past 30 days, while earnings estimates for 2023 have increased from 41 cents to 52 cents over the same time frame.

AVEO Pharmaceuticals beat earnings estimates in three of the last four quarters, while missing on one, delivering a negative earnings surprise of 19.87%, on average. In the last reported quarter, AVEO delivered a negative earnings surprise of 43.75%.


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