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Aduro (ADRO) Q3 Loss Wider Than Expected, Revenues Rise Y/Y

Zacks Equity Research

Aduro BioTech, Inc. ADRO incurred third-quarter 2019 loss of 26 cents per share, wider than the Zacks Consensus Estimate of a loss of 23 cents but narrower than the year-ago loss of 29 cents.

The third-quarter loss included an expense for impairment of intangible assets.

Revenues came in at $4.8 million, up 54.8% year over year, primarily owing to the recognition of an upfront payment received from Eli Lilly LLY in the first quarter of 2019. Notably, in December 2018, Aduro entered into an exclusive collaboration and license agreement with pharma giant Eli Lilly to develop novel immunotherapies for autoimmune and other inflammatory diseases by leveraging its cGAS-STING inhibitor platform.

Meanwhile, sales almost came in line with the Zacks Consensus Estimate of $5 million.

Shares of Aduro have plunged 59.4% so far this year against the industry’s rise of 0.2%.


Quarter in Detail

Research and development expenses declined 17.1% in the reported quarter to $15.5 million owing to lower stock-based compensation and reduced headcount plus decreased costs of deprioritized programs.

General and administrative expenses were $8.7 million, down 4.4% year over year, primarily on the back of lower stock-based compensation and reduced headcount following the strategic reset announced in January this year.

We remind investors that as a result of the strategic reset in the month, Aduro slashed its current workforce by almost 37% and redirected resources to focus on its core programs.

Aduro had $235.4 million worth of cash, cash equivalents and marketable securities as of Sep 30, 2019 compared with $251.6 million on Jun 30, 2019.

Pipeline Update

Aduro’s lead pipeline candidates are STING pathway activator ADU-S100 and anti-APRIL antibody BION-1301.

The company has a collaboration and license deal with Novartis NVS for developing its STING Activator candidate ADU-S100. The candidate is being evaluated in a phase I program as a monotherapy in patients with cutaneously accessible metastatic solid tumors or lymphomas. Aduro is also conducting a phase Ib study to assess ADU-S100 in combination with Novartis’ anti-PD-1 monoclonal antibody spartalizumab for the same indication.

The company is also performing an early-stage study on ADU-S100 in combination with Bristol-Myers’ Yervoy (ipilimumab) for addressing relapsed/refractory melanoma.

Meanwhile, in September 2019, Aduro initiated dosing in a phase II study on ADU-S100 in combination with Merck’s MRK anti-PD-1 antibody Keytruda (pembrolizumab) for the first-line treatment of recurrent or metastatic head and neck squamous cell carcinoma (HNSCC). The study is designed to evaluate the safety and efficacy of the ADU-S100 combo administered intratumorally in the first-line setting.

Notably, in first-quarter 2019, Aduro initiated the phase I clinical study on BION-1301 evaluating healthy volunteers for treating IgA nephropathy. The company plans to start dosing the IgAN patients in 2020.

Aduro Biotech, Inc. Price, Consensus and EPS Surprise

Aduro Biotech, Inc. Price, Consensus and EPS Surprise

Aduro Biotech, Inc. price-consensus-eps-surprise-chart | Aduro Biotech, Inc. Quote

Zacks Rank

Aduro currently 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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