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Why Is Achillion (ACHN) Down 11.2% Since Last Earnings Report?

Zacks Equity Research

A month has gone by since the last earnings report for Achillion Pharmaceuticals (ACHN). Shares have lost about 11.2% in that time frame, underperforming the S&P 500.

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

Achillion Reports Narrower-Than-Expected Q2 Loss

Achillion incurred a loss of 14 cents per share in the second quarter of 2019, in line with the Zacks Consensus Estimate. However, it was wider than the year-ago loss of 12 cents.

The company generated no revenues in the reported quarter.

Research and development (R&D) expenses increased nearly 44.5% from the year-ago period to $15.9 million, primarily due to increased research costs related to pipeline candidates — danicopan and ACH-5228. Moreover, higher manufacturing and formulation costs for ACH-5228 and ACH-5548 increased R&D expenses.

General and administrative expenses declined 31.5% year over year to $5.1 million due to lower personnel fees and stock-based compensation.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Achillion has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, 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

Achillion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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