Epizyme, Inc. (EPZM - Free Report) reported a loss of 42 cents per share in the third quarter of 2016, narrower than both the Zacks Consensus Estimate and the year-ago loss of 56 cents.
Quarter in Detail
The company earned collaboration revenues of $6.6 million in the quarter, significantly higher than the year-ago tally of $0.4 million and beat the Zacks Consensus Estimate of $1 million.
The increased sales was mainly due to the recognition of the $6.0 million milestone earned upon GlaxoSmithKline plc ‘s (GSK - Free Report) initiation of patient dosing in a phase I clinical trial of GSK3326595, a PRMT5 inhibitor invented by Epizyme and licensed to Glaxo
Research and development (R&D) expenses were $23.9 million, up 42.2% primarily due to costs associated with the expansion of the tazemetostat program. Likewise, general and administrative expenses were up 12.7% to $7.5 million, primarily due to the addition of new members to the senior management team in the first half of 2016.
Epizyme’s lead pipeline candidate, tazemetostat, is currently being evaluated in a phase II study in adults with relapsed or refractory non-Hodgkin lymphoma (NHL) and continues to enroll patients. Efficacy and safety data from the phase II studies on NHL and solid tumor are expected in the first half of 2017. Epizyme expects to file for regulatory approval in mid-2017.
The company said that it has initiated a front-line phase Ib/II study on tazemetostat in combination with R-CHOP, the standard-of-care chemotherapy regimen for patients with newly diagnosed diffuse large B cell lymphoma (DLBCL).
Epizyme continues to expect a significant increase in R&D expenses in the fourth quarter due to the ongoing and planned studies on tazemetostat. The company expects G&A expenses to remain almost same through the fourth quarter.
Epizyme maintains that its cash, cash equivalents and marketable securities of $263.3 million as of Sep 30, 2016 will be sufficient to fund its planned operations through at least the second quarter of 2018.
Epizyme’s narrower-than-expected loss in the third quarter was encouraging. With no approved products in its portfolio as of yet, the company relies heavily on its collaborators for revenue. We are encouraged by the company’s efforts to develop its lead candidate tazemetostat for a number of indications.
Epizyme currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the healthcare sector include Infinity Pharmaceuticals, Inc. (INFI - Free Report) and Exelixis, Inc. (EXEL - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Infinity’s loss estimates narrowed from $3.84 to $3.79 for 2016 but remained unchanged for 2017 over the last 60 days. The company posted positive surprises in all of the four trailing quarters with an average beat of 67.62%.
Exelixis’ loss estimates narrowed from 71 cents to 61 cents for 2016 and from loss of 16 cents to earnings of 4 cents for 2017 over the last 60 days. The company posted positive surprises twice in the four trailing quarters with an average beat of 9.1%.
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