Ophthotech (OPHT) Q3 Earnings & Sales Beat, Zimura in Focus
Ophthotech Corporation OPHT reported earnings of $5.25 per share for the third quarter of 2017, beating the Zacks Consensus Estimate of $4.38. The company had reported a loss of $1.71 in the year-ago quarter.
With no approved products in its portfolio, Ophthotech derives revenues from milestone and other payments under collaborations. The company reported collaboration revenues of $206.7 million in the quarter, beating the Zacks Consensus Estimate of $185 million and higher than $1.7 million in the year-ago period.
The significant year-over-year increase in revenues is mainly attributed to recognition of deferred revenues related to completion of deliverables required under its licensing and commercialization agreement with Novartis NVS.
Shares of the biotech company closed 15.9% higher on Thursday. However, Ophthotech’s shares have underperformed the industry in the last three months. Specifically, the company’s shares have lost 44.1% whereas the industry registered an increase of 3%.
In December 2016, the company announced that its then lead candidate, Fovista, failed in two pivotal phase III studies in wet age-related macular degeneration (“AMD”). Following this, Ophthotech announced a major cut in its workforce and termination of Fovista studies. In August 2017, Fovista failed in a third phase III study and the company terminated it as well.
Quarter in Detail
Research and development expenses decreased 79% to $10.7 million, mainly due to lower expenses related to the phase III program on Fovista, which includes a decrease in manufacturing expenses.
General and administrative expenses decreased 40.8% from the year-ago period to $7.1 million due to lower cost related to the company’s operations and infrastructure.
With the failure of Fovista in two pivotal phase III studies, the company is focused on Zimura development programs. The company is developing Zimura in dry and wet AMD, and has plans to initiate studies in Stargardt disease, idiopathic choroidal vasculopathy (“IPCV”), and intermediate/posterior uveitis.
In the quarter, the company modified its ongoing phase IIb study evaluating Zimura in Geographic Atrophy (“GA”), a severe form of dry AMD, to reduce the anticipated time to achieve the primary endpoint of mean rate of change in GA. The study will enroll lesser number of patients and is anticipated to achieve the primary endpoint in 12 months, with top-line data expected in 2019.
Ophthotech also initiated a dose determining phase IIa study, evaluating Zimura in combination with Roche’s RHHBY Lucentis in patients with wet AMD. The top-line data is expected in late 2018.
Moreover, the company remains on track to initiate a phase IIa study on Zimura in combination with Regeneron Pharmaceuticals.’s REGN Eylea in IPCV and a phase IIb study evaluating Zimura monotherapy in Stargardt Disease.
Ophthotech’s cash balance was $180.2 million as of Sep 30, 2017.
The company increased its expectation of cash balance to the range of $155 million to $165 million (previously $145 million to $160 million) by the end of 2017.
Ophthotech carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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