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IVERIC bio (ISEE) Q3 Loss Narrows Y/Y, Zimura Advancing Well

Zacks Equity Research

IVERIC bio ISEE reported a loss of 35 cents per share for third-quarter 2019, narrower than the year-ago quarter’s loss of 41 cents.

With no approved products in its portfolio, IVERIC bio derives revenues from milestone and other payments under collaborations. However, there were no such revenues in the quarter.

Quarter in Detail

Research and development expenses in the third quarter were up 10.6% year over year to $10.4 million. The increase in expenses related to the development of gene therapy and HtrA1 inhibitor programs was offset by lower costs associated with the Zimura programs.

General and administrative expenses decreased 21.7% from the year-ago period to $4.7 million due to lower infrastructure and operational costs.

Cash Balance

IVERIC bio’s cash balance was $94.9 million as of Sep 30, 2019, compared with $106.9 million as of Jun 30, 2019.

The company reiterated its expectation for 2019 cash and cash equivalents in the range of $80-$85 million. The company anticipates its cash resources to support its operations through the first half of 2021.

Zimura's Progress

IVERIC bio announced in October that the phase IIb study, evaluating its lead pipeline candidate Zimura, in patients with geographic atrophy (“GA”) secondary to dry AMD, met its primary endpoint of reduction in the rate of GA growth in a pre-specified analysis. Top-line data from the study demonstrated that Zimura monotherapy achieved a statistically significant reduction in the mean rate of GA growth. The company plans to use this clinical study as a pivotal study, assuming the full data set to continue supporting the top-line results. However, this is subject to regulatory reviews.

During its third-quarter earnings call, the company stated that the robustness of the recently announced data from phase IIb study supports requirement of only one additional pivotal study for Zimura development in GA. The company is anticipating the new study sufficient to support the regulatory approval for Zimura in the above-mentioned indication. This is likely to accelerate the development and a potential approval of the drug.

IVERIC bio is planning to initiate enrollment in the new pivotal study in the first quarter of 2020.

Meanwhile, the company is planning to fund the new pivotal Zimura study itself and anticipates the total cost for the study to be approximately $40-$60 million. With no revenue stream, this will likely put huge pressure on the company’s cash resources available as of September end.

Shares of IVERIC bio declined almost 5.9% on Nov 12 following the earnings release. However, the company’s shares have surged 166.7% so far this year compared with the industry’s growth of 1.2%.

Gene-Therapy Updates

Post its name change to IVERIC bio, the company is now primarily focused on developing gene therapy programs for treating orphan inherited retinal diseases (IRDs). The company has several gene therapy candidates in the pre-clinical stage.

The company expects to initiate phase I/II studies on its gene therapy candidates — IC-100 and IC-200 — in 2020 and 2021, respectively. The company will develop IC-100 for treating rhodopsin-mediated autosomal dominant retinitis pigmentosa (RHO-adRP), a retinal disease impacting peripheral and night vision, and IC-200 as a treatment for BEST1-related retinal diseases.

In July, the company exercised its option under the research agreement with the University of Massachusetts to gain rights to develop and commercialize novel adeno-associated virus (“AAV”) minigene therapy product candidates under the miniCEP290 program. These are being developed for treating Leber congenital amaurosis type 10 (LCA10).

In the same month, the company expanded its gene therapy portfolio by entering a research agreement with the University of Massachusetts to develop novel AAV gene therapy product candidates under miniUSH2A program as a treatment for USH2A-related IRDs, including Usher Syndrome type 2A and USH2A-associated nonsyndromaticadRP. The agreement includes an exclusive option for IVERIC bio to gain rights to develop and commercialize the candidate.

IVERIC bio Price, Consensus and EPS Surprise

 

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Zacks Rank & Stocks to Consider

IVERIC bio currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the pharmaceutical sector include BioDelivery Sciences International, Inc. BDSI, Alkermes plc ALKS and Anika Therapeutics Inc. ANIK. All stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BioDelivery’s loss estimates have narrowed from 26 cents to 22 cents for 2019 and earnings estimates moved up from 19 cents to 22 cents for 2020 over the past 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, the average beat being 66.52%. Share price of the company has increased 58.1% so far this year.

Alkermes’ earnings estimates increased from 36 cents to 52 cents for 2019 and estimates changed from a loss of 11 cents to earnings of 42 cents for 2020 over the past 30 days.The company delivered a positive earnings surprise in the trailing four quarters, the average beat being 236.8%.

Anika’s earnings estimates moved up from $1.75 to $2.03 for 2019 and from $1.38 to $1.62 for 2020 over the past 30 days.The company delivered a positive earnings surprise in the trailing four quarters, the average beat being 53.31%.

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