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Mirati (MRTX) Q2 Earnings Beat, Stock Up on Solid Krazati Sales
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Mirati Therapeutics reported a loss of $3.04 per share for second-quarter 2023, narrower than the Zacks Consensus Estimate of a loss of $3.23 as well as the year-ago quarter’s loss of $3.18 per share.
Mirati reported $13.69 million in revenues for the second quarter, missing the Zacks Consensus Estimate of $13.92 million. Mirati had recorded revenues of $5.4 million in the year-ago quarter.
Quarter in Detail
Second-quarter revenues included $13.4 million as product revenues from Krazati/adagrasib, Mirati’s new cancer drug, compared with $6.3 million in the previous quarter. Revenues increased on robust demand for the product. The FDA approved Krazati, a KRAS G12C inhibitor, to treat adult patients with KRASG12C-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC) in December 2022. No product revenues were recorded in the year-ago quarter.
Mirati’s shares were up 9% in after-hours trading on Tuesday, probably on the strong sales performance of Krazati.
So far this year, the stock price of Mirati has declined 38.6% compared with the industry’s 13% decline.
Image Source: Zacks Investment Research
License and collaboration revenues were $0.3 million in the quarter compared with $5.36 million in the year-ago quarter. License and collaboration revenues represent clinical supply revenues earned under Mirati’s agreement with Zai Lab Limited.
Research and development expenses declined 3.2% from the prior-year quarter’s level to $124.2 million. This decrease was due to a reduction in clinical development costs for sitravatinib as enrollment was completed in the phase III SAPPHIRE study in the second quarter of 2022, and a decrease in share-based compensation.
Selling, general and administrative expenses surged 39.2% from the year-ago quarter’s level to $75.5 million due to an increase in commercial-related costs to support the marketing and sales of Krazati and higher headcount-related costs.
Cash, cash equivalents and short-term investments as of Jun 30, 2023 were $779.4 million compared with $902.3 million as of Mar 31, 2023.
Mirati expects 2023 net cash burn to annualize within a range of $560 million to $580 million (previous expectation: $525-$580 million).
Pipeline Update
A regulatory filing for Krazati is under review in Europe. In July, the European Medicine Agency's Committee for Medicinal Products for Human Use (CHMP) gave a negative opinion regarding granting of conditional marketing authorization Krazati. The CHMP mentioned that though the drug has a favorable risk-benefit profile, it does not meet certain requirements for conditional approval.
Mirati is evaluating the expanded use of adagrasib — both as monotherapy and combinations — in multiple cohorts of the phase I/II KRYSTAL-1 study across multiple solid tumors that harbor KRAS G12C mutations. These include a combination of Krazati with Merck’s (MRK - Free Report) Keytruda in NSCLC and Krazati with Bristol-Myers’ (BMY - Free Report) Erbitux (cetuximab) in advanced colorectal cancer (CRC). Mirati is on track to complete the supplemental new drug application for third-line and beyond CRC in patients with a KRAS G12C mutation by year-end 2023.
In the second quarter, Mirati shared updated data (as of February 28) from two cohorts of its phase II KRYSTAL-7 study of the combination of adagrasib with Merck’s Keytruda in first-line patients with NSCLC with KRAS G12C mutation. The data showed that patient numbers and median follow-up nearly doubled since the prior update in December 2022. Based on the strong data, the company plans to begin enrolment a phase III study for this combination by 2023.
A phase III registrational study is also ongoing in second-line CRC called KRYSTAL-10, which compares the efficacy of Krazati in combination with Bristol-Myers’ Erbitux (cetuximab) versus standard-of-care chemotherapy. The company is currently enrolling patients in the phase III KRYSTAL-10 study and also KRYSTAL-12 study, which is evaluating Krazati versus docetaxel in second-line NSCLC patients. Top-line results from these studies are expected in 2024.
In May 2023, Mirati announced that the phase III SAPPHIRE study, evaluating its other pipeline candidate sitravatinib plus Bristol-Myers’ Opdivo in patients with second or third-line advanced non-squamous NSCLC, did not achieve its primary endpoint of overall survival. Though management did not disclose any study data along with this announcement, it intends to do so at a future medical meeting.
CEO Departs
Along with the earnings release, the company announced the departure of its current chief executive officer (CEO), David Meek. He will be replaced by Charles Baum, Mirati’s president and founder, who will serve as an interim CEO.
Zacks Rank & Stock to Consider
Mirati currently has a Zacks Rank #3 (Hold).
Mirati Therapeutics, Inc. Price, Consensus and EPS Surprise
In the past 30 days, estimates for ACADIA Pharmaceuticals’ 2023 loss per share have narrowed from 53 cents to 41 cents, while that for 2024 have improved from a loss of 11 cents to earnings of 47 cents. Year to date, shares of ACADIA Pharmaceuticals have risen 67.9%.
Earnings of ACADIA Pharmaceuticals beat estimates in two of the last four quarters and missed the mark on two occasions. On average, the company witnessed an earnings surprise of 20.33% over the trailing four quarters.
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Mirati (MRTX) Q2 Earnings Beat, Stock Up on Solid Krazati Sales
Mirati Therapeutics reported a loss of $3.04 per share for second-quarter 2023, narrower than the Zacks Consensus Estimate of a loss of $3.23 as well as the year-ago quarter’s loss of $3.18 per share.
Mirati reported $13.69 million in revenues for the second quarter, missing the Zacks Consensus Estimate of $13.92 million. Mirati had recorded revenues of $5.4 million in the year-ago quarter.
Quarter in Detail
Second-quarter revenues included $13.4 million as product revenues from Krazati/adagrasib, Mirati’s new cancer drug, compared with $6.3 million in the previous quarter. Revenues increased on robust demand for the product. The FDA approved Krazati, a KRAS G12C inhibitor, to treat adult patients with KRASG12C-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC) in December 2022. No product revenues were recorded in the year-ago quarter.
Mirati’s shares were up 9% in after-hours trading on Tuesday, probably on the strong sales performance of Krazati.
So far this year, the stock price of Mirati has declined 38.6% compared with the industry’s 13% decline.
Image Source: Zacks Investment Research
License and collaboration revenues were $0.3 million in the quarter compared with $5.36 million in the year-ago quarter. License and collaboration revenues represent clinical supply revenues earned under Mirati’s agreement with Zai Lab Limited.
Research and development expenses declined 3.2% from the prior-year quarter’s level to $124.2 million. This decrease was due to a reduction in clinical development costs for sitravatinib as enrollment was completed in the phase III SAPPHIRE study in the second quarter of 2022, and a decrease in share-based compensation.
Selling, general and administrative expenses surged 39.2% from the year-ago quarter’s level to $75.5 million due to an increase in commercial-related costs to support the marketing and sales of Krazati and higher headcount-related costs.
Cash, cash equivalents and short-term investments as of Jun 30, 2023 were $779.4 million compared with $902.3 million as of Mar 31, 2023.
Mirati expects 2023 net cash burn to annualize within a range of $560 million to $580 million (previous expectation: $525-$580 million).
Pipeline Update
A regulatory filing for Krazati is under review in Europe. In July, the European Medicine Agency's Committee for Medicinal Products for Human Use (CHMP) gave a negative opinion regarding granting of conditional marketing authorization Krazati. The CHMP mentioned that though the drug has a favorable risk-benefit profile, it does not meet certain requirements for conditional approval.
Mirati is evaluating the expanded use of adagrasib — both as monotherapy and combinations — in multiple cohorts of the phase I/II KRYSTAL-1 study across multiple solid tumors that harbor KRAS G12C mutations. These include a combination of Krazati with Merck’s (MRK - Free Report) Keytruda in NSCLC and Krazati with Bristol-Myers’ (BMY - Free Report) Erbitux (cetuximab) in advanced colorectal cancer (CRC). Mirati is on track to complete the supplemental new drug application for third-line and beyond CRC in patients with a KRAS G12C mutation by year-end 2023.
In the second quarter, Mirati shared updated data (as of February 28) from two cohorts of its phase II KRYSTAL-7 study of the combination of adagrasib with Merck’s Keytruda in first-line patients with NSCLC with KRAS G12C mutation. The data showed that patient numbers and median follow-up nearly doubled since the prior update in December 2022. Based on the strong data, the company plans to begin enrolment a phase III study for this combination by 2023.
A phase III registrational study is also ongoing in second-line CRC called KRYSTAL-10, which compares the efficacy of Krazati in combination with Bristol-Myers’ Erbitux (cetuximab) versus standard-of-care chemotherapy. The company is currently enrolling patients in the phase III KRYSTAL-10 study and also KRYSTAL-12 study, which is evaluating Krazati versus docetaxel in second-line NSCLC patients. Top-line results from these studies are expected in 2024.
In May 2023, Mirati announced that the phase III SAPPHIRE study, evaluating its other pipeline candidate sitravatinib plus Bristol-Myers’ Opdivo in patients with second or third-line advanced non-squamous NSCLC, did not achieve its primary endpoint of overall survival. Though management did not disclose any study data along with this announcement, it intends to do so at a future medical meeting.
CEO Departs
Along with the earnings release, the company announced the departure of its current chief executive officer (CEO), David Meek. He will be replaced by Charles Baum, Mirati’s president and founder, who will serve as an interim CEO.
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-eps-surprise-chart | Mirati Therapeutics, Inc. Quote
A better-ranked stock in the biotech sector is ACADIA Pharmaceuticals (ACAD - Free Report) , which has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 30 days, estimates for ACADIA Pharmaceuticals’ 2023 loss per share have narrowed from 53 cents to 41 cents, while that for 2024 have improved from a loss of 11 cents to earnings of 47 cents. Year to date, shares of ACADIA Pharmaceuticals have risen 67.9%.
Earnings of ACADIA Pharmaceuticals beat estimates in two of the last four quarters and missed the mark on two occasions. On average, the company witnessed an earnings surprise of 20.33% over the trailing four quarters.