Why Is Blueprint Medicines (BPMC) Down 2% Since Last Earnings Report?
It has been about a month since the last earnings report for Blueprint Medicines (BPMC). Shares have lost about 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 Blueprint Medicines 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.
Blueprint Q2 Earnings and Revenues Beat Estimates
Blueprint Medicines Corporation reported a loss of $2.19 per share for the second quarter of 2023, narrower than the Zacks Consensus Estimate of a loss of $2.58. The company had incurred a loss of $2.68 per share in the year-ago quarter.
Quarterly revenues of $57.6 million also surpassed the Zacks Consensus Estimate of $45 million. The company reported total revenues of $36.5 million in the year-ago quarter.
However, Blueprint Medicines did not issue any product sales guidance for Ayvakit for 2023.
Quarter in Detail
Blueprint Medicines’ total revenues comprised of net product revenues from Ayvakit (avapritinib) sales and collaboration revenues. Net product revenues from Ayvakit sales were $39.9 million, which beat the Zacks Consensus estimate of $35.5 million for the total sales of the drug in the reported quarter. Sales of the drug grew 2% on a sequential basis and 40% on a year-over-year basis. Our estimate for total revenues generated from Ayvakit sales was pegged at $32.7 million.
Collaboration revenues were $17.7 million, beating the Zacks Consensus Estimate of $7.92 million, as well as our estimate of $9 million. Blueprint recognizes collaboration revenues from the agreements with CStone Pharmaceutical and Roche.
In June 2018, the company inked a collaboration contract with CStone Pharmaceuticals to develop and commercialize its three clinical-stage candidates in Mainland China, Hong Kong, Macau and Taiwan, either as monotherapies or combo regimes. Blueprint Medicines is eligible to receive future milestone fees.
In July 2021, BPMC transferred the responsibilities of booking the U.S. product sales of Gavreto to Roche. The company only records the share of profit and loss for Gavreto in financial results and does not record any net product revenues from Gavreto sales. As a result, Blueprint Medicines’ current product revenues solely comprise sales from Ayvakit. However, in February 2023, the company announced initiating the process of regaining development and commercialization rights for Gavreto from Roche.
The termination of the collaboration agreement will become effective in February 2024, at which time Blueprint will regain commercialization and development rights to Gavreto from Roche worldwide excluding the CStone Territory.
Research and development (R&D) expenses were $110.1 million, down 14.3% from the year-ago figure. The primary reason for the decrease in R&D expenses was continued operational efficiency gains across Blueprint’s portfolio along with favorable timing of manufacturing of clinical trial materials
Selling, general and administrative expenses were $71.9 million, up 22.5% year over year. The uptick in such expenses is due to higher costs related to the commercialization of Ayvakit in indolent systemic mastocytosis, as well as increased compensation-related costs driven by improved headcount. In Europe, the drug is marketed under the brand name, Ayvakyt, to treat advanced SM.
Blueprint Medicines had cash, cash equivalents and investments worth $836.6 million as of Jun 30, 2023, compared with $961.3 million as of Mar 31, 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Blueprint Medicines has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Blueprint Medicines has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Blueprint Medicines is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Exelixis (EXEL), a stock from the same industry, has gained 7.9%. The company reported its results for the quarter ended June 2023 more than a month ago.
Exelixis reported revenues of $469.85 million in the last reported quarter, representing a year-over-year change of +12%. EPS of $0.31 for the same period compares with $0.22 a year ago.
For the current quarter, Exelixis is expected to post earnings of $0.26 per share, indicating a change of -16.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +3.8% over the last 30 days.
Exelixis has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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