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Wider-than-Expected Loss at ChemoCentryx

Zacks Equity Research

ChemoCentryx, Inc. (CCXI) reported net loss of 28 cents per share in the first quarter of 2013, wider than the Zacks Consensus Estimate of a loss of 27 cents but in line with the year-ago loss.

Revenues increased 89.3% to $1.9 million, slightly below the Zacks Consensus Estimate of $2 million. Revenues primarily consisted of collaborative research and development revenue from related party.

Operating expenses increased 29% during the quarter to $12.2 million. Research and development expenses increased 34% to $9.3 million. The increase was primarily attributable to the advancement of pipeline candidates. General and administrative expenses increased 15.7% to $3.0 million.

Pipeline Updates

The company’s pipeline includes vercirnon for Crohn’s disease and CCX140 for diabetic kidney disease. Vercirnon, the company’s most advanced candidate is being developed in collaboration with GlaxoSmithKline (GSK). Top-line data from the SHIELD-1 phase III trial evaluating vercirnon for Crohn's disease is expected to be released in the second half of 2013. Additionally, interim results from a phase II study assessing CCX140 for diabetic nephropathy is expected in third quarter 2013.

We note that last month, ChemoCentryx completed its follow-on offer of 5.75 million shares at $12.00 per share. After adjusting for underwriter discounts, commissions and offering costs, the net proceeds to the company from the offering were approximately $64.4 million. The company plans to utilize the fund for accelerating CCX140 development and renal franchise expansion.

ChemoCentryx currently carries a Zacks Rank #3 (Hold). Stocks that look better and hold a Zacks Rank #2 include Onyx Pharmaceuticals, Inc. (ONXX) and WuXi PharmaTech (Cayman) Inc. (WX).

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