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Why Is Prothena (PRTA) Down 1.5% Since Last Earnings Report?

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A month has gone by since the last earnings report for Prothena (PRTA - Free Report) . Shares have lost about 1.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Prothena due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Prothena Q1 Earnings Miss Estimates on Higher R&D Expenses

Prothena reported a loss of $1.34 per share in first-quarter 2024, wider than the Zacks Consensus Estimate of a loss of $1.21. The figure was also wider than a loss of 89 cents in the year-ago quarter due to higher expenses and lower revenues.

Total revenues were $0.05 million in the first quarter, missing the Zacks Consensus Estimate of $4 million and declining from $2.2 million in the year-ago quarter.

Total revenues in the first quarter were from license fees recognized under an agreement with Roche. The same in first-quarter 2023 was generated by a collaboration with Bristol Myers Squibb.

Quarter in Detail

Research and development (R&D) expenses surged 43.2% to $64.1 million primarily due to higher clinical trial expenses, higher personnel-related expenses and higher manufacturing expenses.

General and administrative expenses amounted to $17.5 million, up from $13.7 million in the year-ago quarter, primarily due to higher personnel-related and consulting expenses.

As of March 31, 2024, Prothena had $548.7 million in cash, cash equivalents and restricted cash and no debt.

Pipeline Updates

Prothena is evaluating PRX012 — a wholly-owned investigational next-generation subcutaneous antibody targeting a key epitope at the N-terminus of amyloid beta (Aβ) — for treating Alzheimer’s Disease (AD).  Initial phase I single ascending dose and multiple ascending dose (MAD) data support once-monthly subcutaneous administration and ongoing evaluation in MAD cohorts. The ongoing phase I study continues as planned by the company, and an update from the same is expected in 2024.

Prothena is advancing an early-stage pipeline of programs for a number of potential neurological indications with Bristo Myers.

BMS-986446 (formerly PRX005) is designed to be a best-in-class anti-tau, MTBR-specific antibody for the potential treatment of AD.

Bristol Myers Squibb initiated a phase II study on BMS-986446 in approximately 475 patients with early AD.

PRX019, a potential treatment of neurodegenerative diseases with an undisclosed target, is also being developed in collaboration with Bristol Myers.

The company is also developing a dual Aβ-Tau vaccine, PRX123, a potential prevention and treatment for AD. It is a dual-target vaccine targeting key epitopes within the N-terminus of Aβ and MTBR-tau, designed to promote amyloid clearance and block the transmission of pathogenic tau. The FDA cleared an investigational new drug application. The regulatory body granted Fast Track designation to PRX123 for the treatment of AD.  A phase I timeline update is expected in 2024.

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

A phase II study, PASADENA, is being conducted by Roche in patients with early PD.  Data from the study showed that patients taking prasinezumab continued to show reduced motor and functional progression compared with real-world data after four years.

Topline results from the phase IIb PADOVA study, which has completed enrollment, are expected in the second half of this year.

Prothena is also evaluating birtamimab, a potential treatment for AL amyloidosis. PRTA reached a Special Protocol Assessment agreement with the FDA and initiated a confirmatory phase III AFFIRM-AL study of birtamimab in Mayo Stage IV patients with AL amyloidosis. Top-line results from the study are expected between fourth-quarter 2024 and second-quarter 2025.

Novo Nordisk acquired Prothena’s clinical-stage antibody, NNC6019, a potential first-in-class amyloid depleter antibody for the treatment of ATTR cardiomyopathy. Novo Nordisk is conducting an ongoing phase II study in patients with ATTR cardiomyopathy. The study is fully recruited and top-line data from the same is expected in the first half of 2025.


How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Prothena has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the lowest 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.


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.

Performance of an Industry Player

Prothena belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Denali Therapeutics Inc. (DNLI - Free Report) , has gained 14.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

Denali Therapeutics reported revenues of $0 million in the last reported quarter, representing a year-over-year change of -100%. EPS of -$0.68 for the same period compares with -$0.80 a year ago.

For the current quarter, Denali Therapeutics is expected to post a loss of $0.69 per share, indicating a change of -153.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.

Denali Therapeutics has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.

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