ARIAD Falls on Wider-than-Expected Loss, Revenues Miss

Zacks

Shares of ARIAD Pharmaceuticals Inc. (ARIA) fell 4.1% on Aug 6 after it reported a loss of 30 cents per share in the second quarter of 2014, wider than the Zacks Consensus Estimate of a loss of 27 cents. However, the reported loss was narrower than the year-ago loss of 37 cents per share. ARIAD’s stock price has improved in the subsequent trading sessions.


Second quarter revenues decreased 13.5% from the year-ago quarter to $12.1 million, failing to beat the Zacks Consensus Estimate of $14 million.

The Quarter in Detail

In the reported quarter, Iclusig generated sales of $11.9 million. Iclusig sales were $7.9 million in the U.S. following its re-launch in mid-January after undergoing a temporary suspension from Oct 2013.

On the second quarter call, ARIAD said that its cancer drug Iclusig has already penetrated around 50% of the market on a weekly basis. At the end of the second quarter, the company reported 450 prescribers of Iclusig, up 50% from the preceding quarter. Meanwhile, 550 unique patients are receiving Iclusig commercially. The company reported revenues of $4 million from the EU.

R&D expenses decreased 21.9% year over year to $31.8 million. This was primarily due to reduced costs related to Iclusig clinical trials, and decreased personnel costs realized from restructuring initiatives implemented in the fourth quarter of 2013.

SG&A expenses decreased 18.8% year over year to $34.2 million. This decrease was essentially due to reduction in expenses related to commercialization of Iclusig in the U.S. A reduction in the personnel expenses also resulted in the decrease.

Pipeline Updates

In the reported quarter, ARIAD continued to enroll patients for its phase II pivotal study ALTA (ALK in Lung Cancer Trial of AP26113). It is developing the candidate for patients with locally advanced or metastatic non-small cell lung cancer. The company expects to complete patient enrolment for the ALTA study in the third quarter of 2015. It intends to provide an update on the phase I/II in September. Moreover, the company is evaluating Iclusig in multiple cancer indications.

ARIAD currently carries a Zacks Rank #3 (Hold). Investors looking for other well- ranked stocks in the healthcare sector can consider Endo International plc (ENDP), Anacor Pharmaceuticals, Inc. (ANAC) and Endocyte, Inc. (ECYT). While Endo International carries a Zacks Rank #1 (Strong Buy), Anacor Pharmaceuticals and Endocyte hold a Zacks Rank #2 (Buy).

Read the Full Research Report on ANAC
Read the Full Research Report on ARIA
Read the Full Research Report on ECYT
Read the Full Research Report on ENDP


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