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Infinity (INFI) Down 28.2% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research
·4 min read

A month has gone by since the last earnings report for Infinity Pharmaceuticals (INFI). Shares have lost about 28.2% in that time frame, underperforming the S&P 500.

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

Infinity Q4 Loss Wider Than Expected, IPI-549 in Focus

Infinity incurred a loss of 20 cents per share in the fourth quarter of 2019, wider than the Zacks Consensus Estimate of a loss of 19 cents.

Also, the company did not recognize any revenues during the quarter.

The company has not provided any numbers for the fourth quarter of 2019.

2019 Results

The company posted a loss of 83 cents per share in 2019, wider than a loss of 20 cents in 2018.  The loss was, however, wider than the Zacks Consensus Estimate loss of 81 cents.

Revenue during 2019 was $3 million, which primarily relates to the achievement of a $2 million milestone from PellePharm. Revenue during 2018 was $22.1 million, related to the amount received from Verastem for the approval by the FDA of Copiktra.

Research and development expenses escalated 36.9% year over year to $27.1 million in 2019, mainly due to increased clinical and development activities for IPI-549.

General and administrative expenses rose 0.7% to $14.3 million in 2019.

As of Dec 31, 2019, Infinity had total cash and cash equivalents of $42.4 million compared with $58.6 million as of Dec 31, 2018. The company expects its existing cash, cash equivalents and available-for-sale securities, including the $20 million received from BVF in January 2020, to be adequate to satisfy its capital needs till the second half of 2021.

Pipeline Update

During the fourth quarter, 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 Opdivo in platinum-refractory, I/O-naive patients with advanced urothelial cancer. Completion of enrollment is expected in 2020 and data, by mid-2021.

In September 2019, the company initiated a phase II MARIO-3 study in collaboration with Roche AG evaluating IPI-549 in combination with Tecentriq and Abraxane (nab-paclitaxel) for the treatment of front-line triple negative breast cancer (TNBC). The above-mentioned 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. Infinity plans to present data from the study in 2020.

The company completed enrollment in MARIO-1, an ongoing phase I/Ib study of IPI-549 as a monotherapy and in combination with Opdivo in patients with advanced solid tumors. Additional data are expected this year.

Meanwhile, the company in collaboration with Arcus Biosciences is conducting a phase I study to evaluate IPI-549 in combination with AB298, Arcus' dual adenosine receptor antagonist, and Doxil, a chemotherapy, for treating patients with advanced TNBC. Enrollment in the expansion cohort of up to 40 patients is ongoing.

2020 Outlook

The company expects 2020 net loss in the range of $40-$50 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, Infinity has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. 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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, 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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