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Reata (RETA) Q1 Earnings Surpass Estimates, Revenues Miss

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Reata Pharmaceuticals Inc (RETA - Free Report) reported first-quarter 2020 loss of $1.47 per share, narrower than the Zacks Consensus Estimate of a loss of $2.55.

Total revenues, comprising collaboration revenues, were $1.4 million compared with $7.7 million in the year-ago quarter. The significant decline was due to lower license and milestone payments. The top line also missed the Zacks Consensus Estimate of $2.91 million.

Shares of Reata were down 3.8% in after-market trading on May 11, following the earnings release. However, the stock has declined 19.7% so far this year against the industry’s 4.6% increase.

Operating Expenses & Cash Position

Research and development expenses (including stock-based compensation) increased 82.5% year over year to $47.7 million mainly due to higher late-stage clinical activities.

General and administrative expenses (including stock-based compensation) were $20.8 million, up 107% from the year-ago period.

The company had cash and cash equivalents of $624.5 million as of Mar 31, 2020 compared with $664.3 million as of December end.

Pipeline Update

Reata is developing its lead pipeline candidates — bardoxolone methyl (bardoxolone) and omaveloxolone — for rare forms of chronic kidney disease (“CKD”) and neurological diseases, respectively. Please note that Reata re-acquired development, manufacturing and commercialization rights related to omaveloxolone and bardoxolone from AbbVie (ABBV - Free Report) last year.

In March, the company stated that it has stopped the phase III CATALYST study evaluating bardoxolone in patients with connective tissue disease-associated pulmonary arterial hypertension (CTD-PAH). The study was stopped due to higher risk of CTD-PAH patients getting infected with COVID-19 during clinic or in-person visits for evaluation. The company also closed open-label extension study — RANGER — evaluating bardoxolone in patients with PAH.

The company also stopped enrolment in the phase III FALCON study evaluating bardoxolone in patients with autosomal dominant polycystic kidney disease. However, the study continues to evaluate the candidate in enrolled patients. Patient screening and enrollment will start following the improvement in adverse situation caused by COVID-19.

Meanwhile, the company does not expect COVID-19 to have any impact on the pivotal phase III study — CARDINAL — evaluating bardoxolone in patients with CKD caused by Alport syndrome or the planned submission of a new drug application based on CARDINAL study data. Last year, the company reported positive top-line Year I data from the study, demonstrating statistically significant improvement in estimated glomerular filtration rate. The study will evaluate the patient for another year.

In October 2019, the company announced that the phase II study — MOXIe — evaluating its neuromuscular disorder candidate, omaveloxolone, for treating Friedreich’s ataxia has met primary endpoint. The company does not expect any delay in submission of an NDA for omaveloxolone due to COVID-19 by the end of this year.

Reata Pharmaceuticals Inc Price, Consensus and EPS Surprise

 

Reata Pharmaceuticals Inc Price, Consensus and EPS Surprise

Reata Pharmaceuticals Inc price-consensus-eps-surprise-chart | Reata Pharmaceuticals Inc Quote

Zacks Rank & Key Picks

Reata currently carries a Zacks Rank #2 (Buy).

A couple of other top-ranked biotech stocks include Seattle Genetics Inc (SGEN - Free Report) and Immunomedics, Inc. (IMMU - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Seattle Genetics’ loss per share estimates have narrowed from $3.11 to $3.06 for 2020 and from $1.41 to 81 cents for 2021 in the past 30 days. The company’s average four-quarter positive earnings surprise is 16.15%. The stock has surged 40.9% so far this year.

Immunomedics’ loss per share estimates have narrowed from $1.65 to $1.52 for 2020 and from $1.03 to 83 cents for 2021 in the past 30 days. The company’s stock has surged 55.4% so far this year.

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