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Achillion (ACHN) Q4 Loss Widens, Plans Job Cuts to Save Cost
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Achillion Pharmaceuticals, Inc. reported a loss of 17 cents per share for the fourth quarter of 2017, wider than the Zacks Consensus Estimate of a loss of 15 cents and a loss of 3 cents per share in the year-ago quarter.
The company generated no revenues in the reported quarter. However, it reported revenues of $15 million in the fourth quarter of 2016 earned from an agreement with Johnson & Johnson (JNJ - Free Report) , which was terminated in 2017.
Shares of Achillion have underperformed the industry year to date. The company’s shares lost 30.4%, compared to the industry’s decrease of 2.6%.
Research and development (R&D) expenses increased nearly 4.4% from the year-ago period to $15.7 million. The increase was due to higher clinical trial expenses for lead pipeline candidate, ACH-4471, and manufacturing and formulation expenses for next generation factor D inhibitor candidate, ACH-5228. General and administrative (G&A) expenses increased 64.8% year over year to $8.7 million as Achillion paid underwriting fees related to sale of its common stock by J&J.
2017 Performance
The company generated no revenues for full-year 2017. It had reported revenues of $15 million in the year-ago period. Loss per share widened 37.8% year over year to 62 cents. R&D expenses increased almost 10% year over to $65.1 million due to increase in clinical cost related ACH-4471 and preclinical and manufacturing costs for ACH-5228, partially offset by reduced preclinical and manufacturing costs for ACH-4471. G&A expenses rose 18.4% to $24.5 million primarily due to higher legal and consulting fees.
2018 Outlook
The company provided its R&D and SG&A expense guidance for 2018 in the range of $58-$60 million and $19-$20 million, respectively. The company expects R&D expense to decrease due to its restructuring plans. Net loss is expected to be in the range of 55 cents - 58 cents per share
Restructuring Details
Concurrent with the earnings results, the company announced an operational restructuring plan to focus on its existing factor D inhibitor candidates and reduce expenses. Achillion will also reduce its workforce by 20% under its restructuring plan. The company plans to save $10 million in 2018.
Achillion is planning to complete a phase II study on its most advanced candidate, ACH-4471, in C3 glomerulopathy (C3G) or immune complex-mediated membranoproliferative glomerulonephritis (IC-MPGN) in 2018, with interim data planned in the third quarter of 2018. Two more studies are planned for 2018, which will evaluate ACH-4471 in C3G.
Meanwhile, interim data from the ongoing phase II study evaluating ACH-4471 monotherapy in paroxysmal nocturnal hemoglobinuria (“PNH”) is planned for the fourth quarter of 2018. An add-on study is planned for the evaluation of ACH-4471 in combination with Alexion Pharmaceuticals’ PNH drug, Soliris (eculizumab). Interim data is expected in the fourth quarter of 2018.
The company also targets to complete phase I studies on its two next generation factor D inhibitors – ACH-5228 and ACH-5548 – in the fourth quarter of 2018.
Achillion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Exelixis’ earnings per share estimates increased from 73 cents to 77 cents for 2018 over the last 60 days. The company delivered positive earnings surprise in all the four trailing quarters with an average beat of 572.92%. The company’s shares are up 33.9% in the past year.
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Achillion (ACHN) Q4 Loss Widens, Plans Job Cuts to Save Cost
Achillion Pharmaceuticals, Inc. reported a loss of 17 cents per share for the fourth quarter of 2017, wider than the Zacks Consensus Estimate of a loss of 15 cents and a loss of 3 cents per share in the year-ago quarter.
The company generated no revenues in the reported quarter. However, it reported revenues of $15 million in the fourth quarter of 2016 earned from an agreement with Johnson & Johnson (JNJ - Free Report) , which was terminated in 2017.
Shares of Achillion have underperformed the industry year to date. The company’s shares lost 30.4%, compared to the industry’s decrease of 2.6%.
Research and development (R&D) expenses increased nearly 4.4% from the year-ago period to $15.7 million. The increase was due to higher clinical trial expenses for lead pipeline candidate, ACH-4471, and manufacturing and formulation expenses for next generation factor D inhibitor candidate, ACH-5228. General and administrative (G&A) expenses increased 64.8% year over year to $8.7 million as Achillion paid underwriting fees related to sale of its common stock by J&J.
2017 Performance
The company generated no revenues for full-year 2017. It had reported revenues of $15 million in the year-ago period. Loss per share widened 37.8% year over year to 62 cents. R&D expenses increased almost 10% year over to $65.1 million due to increase in clinical cost related ACH-4471 and preclinical and manufacturing costs for ACH-5228, partially offset by reduced preclinical and manufacturing costs for ACH-4471. G&A expenses rose 18.4% to $24.5 million primarily due to higher legal and consulting fees.
2018 Outlook
The company provided its R&D and SG&A expense guidance for 2018 in the range of $58-$60 million and $19-$20 million, respectively. The company expects R&D expense to decrease due to its restructuring plans. Net loss is expected to be in the range of 55 cents - 58 cents per share
Restructuring Details
Concurrent with the earnings results, the company announced an operational restructuring plan to focus on its existing factor D inhibitor candidates and reduce expenses. Achillion will also reduce its workforce by 20% under its restructuring plan. The company plans to save $10 million in 2018.
Achillion is planning to complete a phase II study on its most advanced candidate, ACH-4471, in C3 glomerulopathy (C3G) or immune complex-mediated membranoproliferative glomerulonephritis (IC-MPGN) in 2018, with interim data planned in the third quarter of 2018. Two more studies are planned for 2018, which will evaluate ACH-4471 in C3G.
Meanwhile, interim data from the ongoing phase II study evaluating ACH-4471 monotherapy in paroxysmal nocturnal hemoglobinuria (“PNH”) is planned for the fourth quarter of 2018. An add-on study is planned for the evaluation of ACH-4471 in combination with Alexion Pharmaceuticals’ PNH drug, Soliris (eculizumab). Interim data is expected in the fourth quarter of 2018.
The company also targets to complete phase I studies on its two next generation factor D inhibitors – ACH-5228 and ACH-5548 – in the fourth quarter of 2018.
Achillion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Achillion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Achillion Pharmaceuticals, Inc. Quote
Zacks Rank & Stock to Consider
Achillion Pharma carries a Zacks Rank #3 (Hold).
A stock in the healthcare sector worth considering is Exelixis (EXEL - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Exelixis’ earnings per share estimates increased from 73 cents to 77 cents for 2018 over the last 60 days. The company delivered positive earnings surprise in all the four trailing quarters with an average beat of 572.92%. The company’s shares are up 33.9% in the past year.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>