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Shares of Aerie Pharmaceuticals, Inc. are trading down 5.4% after the company reported mixed results for the first quarter. The company reported a loss of 78 cents in the first-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of 91 cents and the year ago loss of 83 cents.
Aerie’s stock has gained 6% in the year so far compared with the industry’s growth of 8.3%.
In December 2017, Rhopressa was approved by the FDA for the reduction of elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension. The drug was launched by the end of April 2018.
Rhopressa’s revenues came in at $10.9 million in the quarter, missing the Zacks Consensus Estimate of $12.7 million.
Quarter in Detail
Rhopressa revenues reflect a higher proportion of Medicare Part D rebates which are steeper than commercial rebates.
In the reported quarter, research and development expenses increased to $17.9 million from $13 million in the year-ago quarter. Selling, general and administrative expenses surged to $36.3 million from $22.9 million in the year-ago quarter.
Rhopressa now has preferred brand Tier 2 market access for approximately 75% of lives covered under Medicare Part D plans. Rhopressa also has approximately 90% of lives covered under commercial plans, including 55% in preferred brand Tier 2 and 35% in Tier 3.
Pipeline Updates
In Mar 2019, Aerie announced that the FDA has approved Rocklatan 0.02%/0.005% to reduce elevated intraocular pressure (IOP) in patients with open-angle glaucoma or ocular hypertension. Rocklatan is a once-daily, quadruple-action fixed-dose combination of Rhopressa (netarsudil) and Pfizer’s (PFE - Free Report) Xalatan (latanoprost).
A phase III trial, Mercury 3, on Rocklatan continues to progress in Europe.
Aerie’s retina program - AR-13503 (Rho kinase and Protein kinase C inhibitor implant) and AR-1105 (dexamethasone steroid implant) continues to advance as well. The IND (Investigational New Drug application) for AR-13503 (Rho kinase and Protein kinase C inhibitor implant) was accepted by the FDA last month. Clinical trials are expected to begin in the second quarter of 2019 for wet age-related macular degeneration and DME (diabetic macular edema).
In March 2019, a phase II study was initiated on AR-1105 for macular edema due to RVO (retinal vein occlusion). Safety and efficacy data for AR-1105 will be evaluated at six months after dosing.
2019 Guidance
Aerie reiterated its annual guidance. The company expects full-year 2019 net revenues in the range of $110 million to $120 million.
Our Take
Aerie reported mixed results for the fourth quarter. Rhopressa sales miss estimates due to higher rebates. Nevertheless, the approval of second drug, Rocklatan is a big boost for the company and should propel sales in the coming quarters even though competition is stiff from the likes of Bausch Health's (BHC - Free Report) Vyzulta, among others.
Bristol-Myers’ earnings per share estimates have increased from $4.76 to $4.93 for 2020 in the past 60 days.
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Aerie (AERI) Q1 Earnings Beat, Rhopressa Misses Estimates
Shares of Aerie Pharmaceuticals, Inc. are trading down 5.4% after the company reported mixed results for the first quarter. The company reported a loss of 78 cents in the first-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of 91 cents and the year ago loss of 83 cents.
Aerie’s stock has gained 6% in the year so far compared with the industry’s growth of 8.3%.
In December 2017, Rhopressa was approved by the FDA for the reduction of elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension. The drug was launched by the end of April 2018.
Rhopressa’s revenues came in at $10.9 million in the quarter, missing the Zacks Consensus Estimate of $12.7 million.
Quarter in Detail
Rhopressa revenues reflect a higher proportion of Medicare Part D rebates which are steeper than commercial rebates.
In the reported quarter, research and development expenses increased to $17.9 million from $13 million in the year-ago quarter. Selling, general and administrative expenses surged to $36.3 million from $22.9 million in the year-ago quarter.
Rhopressa now has preferred brand Tier 2 market access for approximately 75% of lives covered under Medicare Part D plans. Rhopressa also has approximately 90% of lives covered under commercial plans, including 55% in preferred brand Tier 2 and 35% in Tier 3.
Pipeline Updates
In Mar 2019, Aerie announced that the FDA has approved Rocklatan 0.02%/0.005% to reduce elevated intraocular pressure (IOP) in patients with open-angle glaucoma or ocular hypertension. Rocklatan is a once-daily, quadruple-action fixed-dose combination of Rhopressa (netarsudil) and Pfizer’s (PFE - Free Report) Xalatan (latanoprost).
A phase III trial, Mercury 3, on Rocklatan continues to progress in Europe.
Aerie’s retina program - AR-13503 (Rho kinase and Protein kinase C inhibitor implant) and AR-1105 (dexamethasone steroid implant) continues to advance as well. The IND (Investigational New Drug application) for AR-13503 (Rho kinase and Protein kinase C inhibitor implant) was accepted by the FDA last month. Clinical trials are expected to begin in the second quarter of 2019 for wet age-related macular degeneration and DME (diabetic macular edema).
In March 2019, a phase II study was initiated on AR-1105 for macular edema due to RVO (retinal vein occlusion). Safety and efficacy data for AR-1105 will be evaluated at six months after dosing.
2019 Guidance
Aerie reiterated its annual guidance. The company expects full-year 2019 net revenues in the range of $110 million to $120 million.
Our Take
Aerie reported mixed results for the fourth quarter. Rhopressa sales miss estimates due to higher rebates. Nevertheless, the approval of second drug, Rocklatan is a big boost for the company and should propel sales in the coming quarters even though competition is stiff from the likes of Bausch Health's (BHC - Free Report) Vyzulta, among others.
Zacks Rank & Another Key Pick
Aerie currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the healthcare sector is Bristol-Myers Squibb (BMY - Free Report) , which sports a Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bristol-Myers’ earnings per share estimates have increased from $4.76 to $4.93 for 2020 in the past 60 days.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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