Epizyme's (EPZM) Q1 Earnings Beat Estimates, Revenues Miss
Epizyme Inc. EPZM incurred a loss of 51 cents per share in first-quarter 2020, which was narrower than the Zacks Consensus Estimate of a loss of 74 cents but wider than the year-ago loss of 39 cents. The wider year-over-year loss was due to increased selling, general and administrative (SG&A) expenses related to the company’s buildout of the salesforce and infrastructure to support the commercial launch of Tazverik.
In January 2020, the FDA granted accelerated approval to tazemetostat for the treatment of adults and pediatric patients aged 16 years and older with metastatic or locally advanced Epithelioid Sarcoma (ES) not eligible for complete resection. It will be marketed under the brand name Tazverik. Tazverik became commercially available to patients on Feb 1, 2020.
Total revenues for the first quarter of 2020 were $1.4 million, which missed the Zacks Consensus Estimate of $3 million.
Shares of Epizyme have plunged 32.6% in the year so far compared with the industry’s 0.8% decline.
Quarter in Detail
Product revenues came in at $1.3 billion from net sales of Tazverik in the United States in the first two months of commercialization. Collaboration revenues in first-quarter 2020, earned as part of the company’s alliance with Boehringer Ingelheim, were $0.1 million.
Research and development expenses declined to $25.2 million from $26.9 million in the year-ago quarter.
SG&A expenses more than doubled to $26.9 million due to commercialization expenses for Tazverik.
Epizyme had $376.5 million of cash, cash equivalents and marketable securities, as of Mar 31, 2020, compared with $381.1 million as of Dec 31, 2019. The company expects its cash runway to extend to at least 2022.
Pipeline Update
The FDA accepted the company’s supplemental NDA (sNDA) for the accelerated approval of Tazverik for a proposed indication of patients suffering from relapsed or refractory follicular lymphoma who have received at least two prior lines of systemic therapy. The FDA granted Priority Review to the sNDA and set an action date of Jun 18, 2020. The company has already made commercialization plans for the same.
Expected Milestones in 2020
The company expects to complete the safety portion of the ongoing, global phase Ib/III confirmatory study assessing Tazverik in combination with doxorubicin compared with doxorubicin plus placebo as a front-line treatment for ES and advance into the efficacy portion of the study.
The company also expects to complete the safety portion of the ongoing, global phase Ib/III confirmatory study assessing Tazverik in combination with Revlimid plus Rituximab compared with only Revlimid and Rituximab plus placebo in the second-line treatment setting for FL and advance into the efficacy portion of the study.
While approval of Tazverik is a great boost for Epizyme, competition is stiff from bigwigs like Novartis NVS, Pfizer PFE and Merck MRK. Hence, gaining market share in its targeted space will be a daunting task for Epizyme.
Currently, Epizyme is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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