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Prothena (PRTA) Down 14.1% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research
In the latest trading session, Arbor Realty Trust (ABR) closed at $12.28, marking a -0.57% move from the previous day.

A month has gone by since the last earnings report for Prothena (PRTA). Shares have lost about 14.1% in that time frame, underperforming the S&P 500.

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

Prothena's Q1 Earnings Beat Estimates, Revenues Miss

Prothena reported mixed results for the first quarter of 2019. The company reported a loss of 52 cents per share, narrower than the Zacks Consensus Estimate of a loss of 60 cents and the year-ago quarter’s loss of $1.26.

Quarterly revenues came in at $0.19 million, missing the Zacks Consensus of $0.20 million. Revenues were also down from $0.23 million in the year-ago quarter. Revenues mainly came from the company’s collaboration with Roche Holdings.

Quarter in Detail

R&D expenses were $13.3 million, down 61.7% year over year due to lower clinical trial costs, reduced consulting and personnel costs, and decreased product manufacturing expenses.

General and administrative (G&A) expenses came in at $9.9 million, down from $14.2 million in the year-ago quarter.

As of March 31, 2019, Prothena had $414.2 million in cash, cash equivalents and restricted cash.

Pipeline Updates

The company is evaluating prasinezumab (PRX002/RG7935) in collaboration with Roche for the treatment of Parkinson’s disease. A phase II study, PASADENA, which is being conducted by Roche among patients suffering from Parkinson`s disease, is ongoing and data from the part I study is expected in 2020.

Also, Prothena initiated a phase I study on PRX004 in patients with hereditary ATTR amyloidosis in the second quarter of 2018. The study continues to enroll patients.  Preliminary data from lower dose cohorts, including safety, tolerability and pharmacodynamics, are expected in the fourth quarter of 2019.

Prothena has a global neuroscience research & development collaboration with Celgene to develop new therapies for a broad range of neurodegenerative diseases. The collaboration is focused on three targets implicated in the pathogenesis of several neurodegenerative diseases, inducing tau, TDP-43 and a third that is undisclosed. The preclinical tau program, part of a worldwide collaboration with Celgene, initiated cell line development of a lead candidate.

The company recently reported results from the phase III VITAL study of NEOD001 in AL amyloidosis and the company is exploring business development opportunities that could result in further clinical investigation of NEOD001.
 

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 9.02% due to these changes.

VGM Scores

Currently, Prothena has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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. It comes with little surprise Prothena has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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