A month has gone by since the last earnings report for Esperion Therapeutics (ESPR). Shares have lost about 10.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Esperion Therapeutics due for a breakout? 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.
Esperion Q2 Loss Wider Than Expected, Revenues Beat
Esperion incurred a loss of $2.01 per share in the second quarter of 2019, wider than the Zacks Consensus Estimate of $1.86. The company had incurred loss of $1.71 per share in the year-ago period.
The company generated revenues of $1 million, which beat the Zacks Consensus Estimate of $0.93 million. Revenues were mainly attributable to initial recognition of the upfront payment related to the commercial agreement with Daiichi Sankyo Europe.
Quarter in Details
Research and development (R&D) expenses increased 10.8% from the year-ago period to $42.8 million. The rise was primarily due to higher cost needed to support cardiovascular outcomes study on bempedoic acid and manufacturing of its candidates for commercial supply.
General and administrative (G&A) expenses were up 94% year over year to $13.5 million primarily due to costs related to support pre-commercialization activities for both the candidates.
As of Jun 30, 2019, Esperion had cash, cash equivalents and investment securities of $302.2 million compared with $229.7 million as of Mar 31, 2018.
In June, Esperion entered into a revenue interest purchase agreement of $200 million with an investor group to extend its resources. The company has received $125 million upfront. The company will receive $25 million after bempedoic acid monotherapy and combination therapy are approved and the remaining $50 million upon launch of the products.
Esperion maintained its guidance for collaborations revenues and operating expenses in 2019. The company expects income from collaboration and license agreement to be $150 million. R&D expense is estimated between $115 million and $120 million while G&A expense is expected in the range of $60-$65 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -11.58% due to these changes.
At this time, Esperion Therapeutics has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth 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. Notably, Esperion Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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