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Prothena (PRTA) Up 2.9% Since Last Earnings Report: Can It Continue?

·3 min read

A month has gone by since the last earnings report for Prothena (PRTA). Shares have added about 2.9% in that time frame, outperforming the S&P 500.

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

Prothena Q1 Loss Narrower Than Expected, Revenues Beat

Prothena reported a loss of 59 cents per share, narrower than the Zacks Consensus Estimate of a loss of 60 cents and wider than the year-ago quarter’s loss of 52 cents.

Quarterly revenues came in at $0.14 million, missing the Zacks Consensus Estimate by 37.33%. Revenues were down from $0.19 million in the year-ago quarter. Revenues mainly came from the company’s collaboration with Roche Holdings.

Quarter in DetailR&D expenses were $15.2 million, up from $13.3 million in the year-ago quarter due to lower clinical trial costs due to higher collaboration expense with Roche, higher manufacturing costs (primarily related to the tau and Aβ programs) and higher clinical trial costs (primarily associated with the PRX004 program).

General and administrative (G&A) expenses came in at $9.7 million, slightly down from $9.9 million in the year-ago quarter.

As of Mar 31, 2020, Prothena had $355.4 million in cash, cash equivalents and restricted cash.

Pipeline Updates

Part 1 of the phase II PASADENA study in patients with early Parkinson’s disease being conducted by partner Roche is complete. Based on ongoing evaluation of part 1 PASADENA study data, including potential discussions with health authorities, a further update on prasinezumab is expected later in the year. The 52-week blinded extension of the study (Part 2 of the phase II PASADENA study) is ongoing.

The phase I study of PRX004 is fully enrolled and as of early March patients in all 6 cohorts had received the three infusions and assessments that comprise the dose-escalation portion of the study. Interim data from cohorts 1 through 5 was reported in December. Roche currently expects additional data from the dose-escalation and LTE portions of the study, as well as an update on next steps for clinical development, to be reported later this year.


 

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Prothena has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, 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

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Prothena has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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