Editas (EDIT) Q3 Earnings & Revenues Beat, Pipeline in Focus
Editas Medicine, Inc. EDIT incurred a loss of 55 cents per share in the third quarter of 2023, narrower than the Zacks Consensus Estimate of a loss of 64 cents per share. The company had reported a loss of 81 cents per share in the year-ago quarter.
Collaboration and other research and development revenues, which comprise the company’s top line, were $5 million in the reported quarter, up significantly from $0.04 million reported in the year-ago quarter. The reported figure beat the Zacks Consensus Estimate by 5.5%. The uptick in revenues was primarily driven by the recognition of the upfront payment from Vor Bio in the third quarter of 2023.
In exchange, Editas provided Vor Bio a non-exclusive Cas9 license for the development of ex vivo Cas9 gene-edited hematopoietic stem cell therapies for the treatment and/or prevention of hematological malignancies. Per the terms of the agreement, EDIT is further eligible to receive certain developmental, regulatory and commercial-based milestone payments, along with royalties on medicines developed utilizing its technology.
EDIT’s stock jumped about 18.2% in the last trading session, owing to the earnings beat and its pipeline program, which remained on track. Year to date, shares of Editas have lost 6.3% compared with the industry’s 21% decline.
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Quarter in Detail
In the third quarter of 2023, research and development expenses (R&D) decreased slightly to $40.5 million compared with $41.3 million in the year-ago period. The decline in R&D expenses was due to Editas’ strategic reprioritization, including a targeted clinical and manufacturing focus on EDIT-301 and reduced employee-related costs.
Under the strategic reprioritization effort announced in January 2023, Editas redirected all its resources to the development of EDIT-301 as its lead candidate. The company also discontinued internal investments in inherited retinal disease programs and its wholly-owned multiplexed edited iPSC-derived iNK cell programs, only to be developed in collaboration. The workforce of the company has also been reduced by approximately 20% to extend the cash runway into 2025.
General and administrative expenses were $15 million in the reported quarter, down 7.4% year over year. The decrease was on the grounds of reduced headcount-related expenses, including stock compensation and reduced legal costs.
Editas had cash, cash equivalents and investments worth $446.4 million as of Sep 30, 2023 compared with $480 million as of Jun 30, 2023. The company expects its existing cash, cash equivalents and marketable securities to fund operating expenses and capital expenditure into the third quarter of 2025.
Pipeline Updates
Editas has no approved products in its portfolio at the moment. Therefore, pipeline development remains the key focus of the company.
The company is evaluating the safety and efficacy of its investigational gene-editing medicine, EDIT-301, for treating sickle cell disease (SCD). Editas continues to enroll and dose patients in the RUBY study for SCD.
Editas had previously shared its intention to dose 20 total SCD patients in the RUBY study of EDIT-301 by the end of the year. However, in the earnings call, EDIT reported that it now expects to dose the 20th patient in the RUBY study in January 2024 due to individual patient schedules.
Last month, the company reported that the FDA has granted the Regenerative Medicine Advanced Therapy designation to EDIT-301 in the SCD indication. EDIT-301 also enjoys the FDA’s Orphan Drug Designation for the treatment of SCD.
The company is also evaluating EDIT-301 for the treatment of transfusion-dependent beta thalassemia (TDT). EDIT continues to enroll and dose patients in the EdiTHAL study for TDT.
Editas remains on track to share data from both studies at an upcoming medical conference.
Editas Medicine, Inc. Price and Consensus
Editas Medicine, Inc. price-consensus-chart | Editas Medicine, Inc. Quote
Zacks Rank and Stocks to Consider
Editas currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks worth mentioning are Dynavax Technologies DVAX, Apellis Pharmaceuticals APLS and Adicet Bio, Inc. ACET. While DVAX sports a Zacks Rank #1 (Strong Buy), APLS and ACET carry a Zacks Rank #2 (Buy) each at present.
You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, the Zacks Consensus Estimate for Dynavax’s 2023 loss per share has narrowed from 23 cents to 22 cents. The estimate for Dynavax’s 2024 earnings per share is currently pegged at 8 cents. Year to date, shares of DVAX have gained 33.6%.
DVAX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 25.78%.
In the past 30 days, the Zacks Consensus Estimate for Apellis’ 2023 loss per share has narrowed from $4.89 to $4.60. During the same time frame, the estimate for Apellis’ 2024 loss per share has narrowed from $2.77 to $1.94. Year to date, shares of APLS have lost 9.4%.
APLS beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average negative earnings surprise of 3.91%.
In the past 30 days, the estimate for Adicet Bio’s 2023 loss per share has remained constant at $2.93. During the same period, the estimate for Adicet’s 2024 loss per share has remained constant at $2.40. Year to date, shares of ACET have fallen 81.5%.
ACET’s earnings beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average negative surprise of 7.70%.
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