Prothena (PRTA) Surges 12.3%: Is This an Indication of Further Gains?
Prothena PRTA shares ended the last trading session 12.3% higher at $39.62. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.3% gain over the past four weeks.
Prothena recently provided an update on its pipeline progress. The ongoing phase I study on PRX012 for the treatment of Alzheimer’s Disease (AD) continues as planned and an update is expected in 2024. An investigational new drug application for PRX123 has been cleared by the FDA and timeline for phase I is expected in 2024. The phase III study on birtamimab for AL Amyloidosis is ongoing and topline results are now expected in between 4Q 2024 and 2Q 2025 (earlier expectation was 2024).
The company remains on track with its patnered programs with Bristol Myers Squibb (BMS-986446 for the treatment of Alzheimer’s disease), Roche (prasinezumab for the treatment of Parkinson’s disease) and Novo Nordisk (NNC6019 for the treatment of ATTR amyloidosis). It also stated that its cash, cash equivalents, and restricted cash of approximately $621 million at the end of 2023 is sufficient capital for completion of its ongoing clinical trials and beyond too.
However, shares of the company were down 13.3% on Jan 8 following this update probably due to revised timeline for birtamimab phase III readout. Nevertheless, shared regained the lost territory on Jan 9.
This drug developer is expected to post quarterly loss of $1.07 per share in its upcoming report, which represents a year-over-year change of -991.7%. Revenues are expected to be $2.06 million, down 95.9% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Prothena, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on PRTA going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Prothena is a member of the Zacks Medical - Biomedical and Genetics industry. One other stock in the same industry, Merus N.V. (MRUS), finished the last trading session 2.1% lower at $32.50. MRUS has returned 45.1% over the past month.
Merus N.V.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.70. Compared to the company's year-ago EPS, this represents a change of +61.3%. Merus N.V. currently boasts a Zacks Rank of #2 (Buy).
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