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Why Is Epizyme (EPZM) Down 29.7% Since Last Earnings Report?

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It has been about a month since the last earnings report for Epizyme (EPZM). Shares have lost about 29.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Epizyme due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Epizyme's Q4 Loss Wider Than Expected, Revenues Lag

Epizyme incurred a loss of 49 cents per share for fourth-quarter 2021, wider than the Zacks Consensus Estimate of a loss of 41 cents but narrower than the year-ago period’s loss of 65 cents.

Total revenues for the fourth quarter were $11.6 million, which missed the Zacks Consensus Estimate of $23.4 million but increased from the year-ago quarter’s $8.4 million.

Quarter in Detail

The drug generated net product revenues worth $11.6 million in the fourth quarter from commercial sales in ES and FL. Total end-user demand grew 14% sequentially, driven primarily by FL patient sales.

Adjusted research and development expenses declined to $26.6 million from $31.5 million in the year-ago quarter. Selling, general and administrative expenses also declined to $25.9 million from $30.5 million in the prior-year quarter.

Epizyme had $176.8 million of cash, cash equivalents, and marketable securities as of Dec 31, 2021 compared with $221.3 million on Sep 30, 2021.

Full-Year 2021 Results

The company incurred a loss of $2.45 per share for 2021, wider than the Zacks Consensus Estimate of a loss of $2.37 and the year-ago loss of $2.29.

Revenues were $37.4 million for 2021, which missed the Zacks Consensus Estimate of $55.3 million but increased from the year-ago figure of $15.8 million.

2022 Guidance

EPZM announced plans to lower headcount by approximately 12%, resulting in estimated severance and termination costs of $2.8-$3.2 million.

The company expects adjusted operating expenses for 2022 between $160 million and $180 million, down from the earlier guidance of $170-$190 million provided this January.

Based on the reduced expectations and considering the amount raised by Epizyme from a secondary issue of equity shares earlier this year, it expects its cash runway to extend to third-quarter 2023.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Epizyme has an average Growth Score of C, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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


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