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Why Is Prothena (PRTA) Up 36.1% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for Prothena (PRTA). Shares have added about 36.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Prothena due for a pullback? 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 Reports Narrower-than-Expected Loss in Q3

Prothena reported a loss of 49 cents per share, narrower than the Zacks Consensus Estimate of a loss of 54 cents and the year-ago quarter’s loss of 62 cents.

Quarterly revenues came in at $0.20 million, surpassing the Zacks Consensus of by 36.67%. Revenues were down from $0.25 million in the year-ago quarter. Revenues mainly came from the company’s collaboration with Roche

Quarter in Detail

R&D expenses were $12.5 million, down from $18.5 million in the year-ago quarter due to lower clinical trial costs.

General and administrative (G&A) expenses came in at $8.7 million, down from $9.2 million in the year-ago quarter.

As of Sep 30, 2019, Prothena had $393 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 of the study are expected in 2020.

Prothena has a global neuroscience research & development collaboration with Celgene Corp. 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 an undisclosed third. The preclinical tau program initiated the cell-line development of a lead candidate in the second quarter.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.61% 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. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest 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 downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Prothena has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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