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Infinity (INFI) Up 6% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Infinity Pharmaceuticals (INFI - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Infinity due for a pullback? 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 catalysts.

Infinity Earnings and Sales Miss Estimates in Q1

Infinity reported a loss of 24 cents in the first quarter of 2019, wider than a loss of 18 cents in the year-ago quarter. Loss was also wider than the Zacks Consensus Estimate of a loss of 5 cents.

Revenues in the first quarter were $2.1 million, which mainly relates to the achievement of a $2-million milestone from PellePharm for the initiation of a phase III study, investigating patidegib (a hedgehog pathway inhibitor) in patients with Gorlin Syndrome. The company did not realize any revenues in the year-ago quarter. Revenues missed the Zacks Consensus Estimate of $10 million.

Infinity recognized the $30-million gross proceeds from the Copiktra royalty monetization as a liability, net of transaction costs, as of Mar 31, 2019. The company is amortizing the liability to non-cash interest expenses, and will continue to recognize the royalty revenues that Verastem pays to HealthCare Royalty Partners III, L.P. (HCR) as non-cash royalty revenues.

 2019 Outlook

The company expects net loss for 2019 to range from $40 million to $50 million, including the Copiktra royalty monetization updated from the previous guidance of $30-$40 million.

Infinity expects its existing cash, cash equivalents and available-for-sale securities to be adequate to satisfy the company's capital needs in the second half of 2020.

Pipeline Updates

The company announced that it will initiate MARIO-3, a phase II study of novel triple combination front-line therapy in clinical collaboration with Roche/Genentech.

The data that will be generated in the front line with MARIO-3 will complement the data that will be generated in the second line with MARIO-275. MARIO-275, being conducted in collaboration with Bristol-Myers Squibb, is a phase II study evaluating the combination of IPI-549 and Opdivo (nivolumab) in immuno-oncology naive patients with urothelial cancer. The study will be initiated in the second quarter of 2019.

The company expects to complete enrollment in MARIO-1 combination expansion cohorts, including augmented melanoma expansion cohort and TNBC expansion cohort, in the second half of 2019.

In the second half of 2019, the company will also initiate a study in collaboration with Arcus BioSceinecs Inc. to evaluate IPI-549 combined with the latter’s adenosine inhibitor, AB928, and Abraxane in patients with previously-treated advanced TNBC.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.67% due to these changes.

VGM Scores

At this time, Infinity has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Infinity has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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