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Infinity (INFI) Up 4% Since Last Earnings Report: Can It Continue?

Zacks Equity Research
·3 min read

A month has gone by since the last earnings report for Infinity Pharmaceuticals (INFI). Shares have added about 4% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Infinity 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 catalysts.

Infinity Q1 Earnings Lag Estimates, IPI-549 in Focus

Infinity incurred a loss of 19 cents per share in the first quarter of 2020, wider than the Zacks Consensus Estimate of a loss of 9 cents but narrower than the year-ago quarter’s loss of 24 cents.

Also, the company’s royalty revenues of $0.42 million beat the Zacks Consensus Estimate of $0.25 million. In the year-ago quarter, the company recorded royalty revenues of $0.12 million.

Quarter in Detail

Research and development expenses escalated 25.8% year over year to $7.3 million in the reported quarter, mainly due to an increase in clinical and development activities for IPI-549.

General and administrative expenses were $3.3 million in the reported quarter, down 2.9% year over year.

As of Mar 31, 2020, Infinity had total cash and cash equivalents of $50.3 million compared with $42.4 million at the end of Dec 31, 2019. The company expects its existing cash, cash equivalents and available-for-sale securities to be adequate for satisfying its capital needs through the second half of 2021.

Pipeline Update

In March 2020, the FDA granted a Fast Track designation to the combo of IPI-549 plus Bristol Myers’ Opdivo for the treatment of advanced urothelial cancer.

In the fourth quarter of 2019, the company initiated MARIO-275, an ongoing, global, randomized, controlled phase II study in collaboration with Bristol-Myers Squibb, to evaluate IPI-549 in combination with the latter’s Opdivo in platinum-refractory, I/O-naive patients with advanced urothelial cancer. Infinity is currently enrolling patients in the study.

The company continues to review this data with the IDMC and plans to carry on treating patients who are being evaluated in the study with modifications including additional patient monitoring and a dose reduction. The company is voluntarily pausing enrollment and amending the protocol to ensure patient safety, evaluating the potential benefit of IPI-549 plus Opdivo.

Meanwhile, in September 2019, Infinity initiated a phase II MARIO-3 study in collaboration with Roche evaluating IPI-549 in combination with Tecentriq and Abraxane (nab-paclitaxel) for the treatment of front-line triple negative breast cancer (TNBC). The study also includes a cohort evaluating IPI-549 in combination with Tecentriq and Avastin (bevacizumab) for front-line PDL1+ and PDL1-renal cell cancer (RCC) patients.

However, Infinity is experiencing delays in enrollment and site initiation for the MARIO-3 study and is voluntarily pausing enrollment in the MARIO-275 study to ensure patient safety.

2020 Outlook

The company expects full-year net loss in the range of $40-$50 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month. The consensus estimate has shifted 7.69% due to these changes.

VGM Scores

Currently, Infinity has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, 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.

Outlook

Infinity has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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