Adverum Biotechnologies, Inc. ADVM reported a loss of 36 cents in the second quarter of 2016, narrower than both the Zacks Consensus Estimate and the year-ago loss of 38 cents.
With no approved product in its portfolio yet, the company’s top line solely comprises collaboration and license revenues.
In the reported quarter, Avalanche Biotech’s total revenue came in at $0.3 million, up from $0.2 million in the year-ago quarter.
Research and development (R&D) expenses were $7.9 million, up from $5.1 million in the year-ago quarter due to incremental expenses related to the Annapurna Therapeutics operations. General and administrative expenses were $5.1 million, up from $5.0 million in the year-ago quarter.
We note that in Feb 2016, the company (formerly known as Avalanche Biotechnologies) entered into a definitive agreement to acquire all outstanding shares of Annapurna Therapeutics for approximately 17.6 million newly issued shares of the company’s common stock. In May 2016, Avalanche closed its transaction with Annapurna Therapeutics and the combined company was renamed as Adverum Biotechnologies, Inc. Adverum has approximately 41.2 million shares of common stock outstanding. Avalanche stockholders own approximately 62.5% of the combined company, while Annapurna shareholders own approximately 37.5% of Adverum.
ADVERUM BIOT Price, Consensus and EPS Surprise
ADVERUM BIOT Price, Consensus and EPS Surprise | ADVERUM BIOT Quote
The Annapurna acquisition has added a number of early-stage candidates to Adverum’s portfolio including ANN-001, ANN-002 and ANN-003 among others. The first human study on ANN-001 for the treatment of alpha 1 antitrypsin (A1AT) deficiency is expected to begin in the second half of 2016, while that on ANN-002 for the treatment of hereditary angioedema will be initiated in 2017.
Before the Annapurna acquisition, the company’s primary focus was on the development of AVA-101 for the treatment of wet age-related macular degeneration (AMD). However, Adverum decided not to commence a phase IIb study on AVA-101 in the second half of 2015. The company had conducted a detailed analysis of data from a phase IIa study on AVA-101 and concluded that there was no overall evidence of a complete and/or durable anti-VEGF response in the majority of patients receiving the candidate. The company has now decided to discontinue the development of AVA-101 and AVA-201 after analyzing positive preclinical data on different anti-VEGF compounds in non-human primate studies.
Hence, the company will now concentrate on the preclinical development of new anti-VEGF gene therapy candidates that focus on intravitreal delivery utilizing a proprietary vector. Adverum is expected to provide additional details on its anti-VEGF program at a scientific meeting later this year.
We remind investors that Avalanche Biotech has a collaboration agreement with Regeneron Pharmaceuticals, Inc. REGN to discover, develop and commercialize novel gene therapy products for the treatment of ophthalmologic diseases, using the Ocular BioFactory platform. Other candidates in its pipeline include AVA-311 for the treatment of juvenile X-linked retinoschisis (XLRS), as part of the collaboration with Regeneron, and AVA-322 and AVA-323 for the treatment of color vision deficiency (CVD), also known as red-green color blindness.
We expect investor focus to remain on further updates from the company, going ahead.
Adverum Biotech carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Pacira Pharmaceuticals, Inc. PCRX and Corcept Therapeutics Incorporated CORT. Both these stocks sport a Zacks Rank #1 (Strong Buy).
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