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It has been about a month since the last earnings report for Blueprint Medicines (BPMC). Shares have added about 15.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blueprint Medicines due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Blueprint Q1 Earnings Top, Revenues Soar Y/Y
Blueprint incurred a loss of $2.11 per share in the first quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $2.15 but wider than the year-ago quarter’s loss of $1.98.
Total revenues of $6.2 million were above the Zacks Consensus Estimate of $5 million. The top line also grew significantly year over year, mainly owing to increased collaboration revenues and product sales.
In January 2020, Blueprint Medicines’ lead product Ayvakit (avapritinib) was approved by the FDA for treating unresectable or metastatic gastrointestinal stromal tumor (GIST), harboring a PDGFRA exon 18 mutation including PDGFRA D842V mutations in adults.
Following this nod, Ayvakit became the first precision therapy to have won the FDA nod for treating genomically-defined patients with GIST, a rare form of cancer. Ayvakit in its first partial quarter since its launch in January this year generated sales worth $3.5 million. The drug is also under review in Europe with a decision pending in the third quarter 2020. A potential approval should boost Ayvakit’s sales in the quarters ahead.
Meanwhile, first-quarter collaboration revenues of $2.7 million rose significantly year over year. This portion of the top line is derived from the company’s partnership with Roche and CStone Pharmaceuticals, which was formed to develop and commercialize its pipeline candidates.
Quarter in Detail
Research and development expenses were $84.1 million, up 13.2% from the year-ago figure, mainly due to higher spending associated with the lead candidates’ development and increased personnel costs.
General and administrative expenses were $35.7 million, up 115.1% year over year on account of higher personnel fees, infrastructure costs and other commercial costs.
Blueprint Medicines had cash, cash equivalents and marketable securities worth $750.4 million as of Mar 31, 2020, higher than the sequential quarter’s $548 million.
Ayvakit & Other Pipeline Updates
In April 2020, Blueprint Medicines announced that the phase III VOYAGER study evaluating the safety and efficacy of Ayvakit compared to Bayer’s Stivarga (regorafenib) in patients with third- and fourth-line GIST, did not meet its primary endpoint of improvement in progression-free survival (PFS) for Ayvakit versus Stivarga. Based on the top-line data from the VOYAGER study, the company plans to discontinue further development of Ayvakit for GIST indications other than PDGFRA exon 18 mutant GIST.
Notably, Ayvakit is also being studied for advanced, indolent and smoldering forms of systemic mastocytosis (SM).
This apart, Blueprint Medicines submitted an NDA to the FDA and marketing applications in the EU for its precision therapy, pralsetinib, to address RET fusion-positive non-small-cell lung carcinoma (NSCLC). Additionally, pralsetinib is being studied for the treatment of RET-mutant medullary thyroid carcinoma (MTC). The company is further on track to file an NDA for the MTC indication in the second quarter of 2020 under the FDA's Real-Time Oncology Review pilot program.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
Currently, Blueprint Medicines has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Blueprint Medicines has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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