A month has gone by since the last earnings report for Prothena (PRTA). Shares have lost about 17.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Prothena 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.
Prothena Q3 Earnings Beat Estimates, Pipeline Progress in Focus
Prothena Corporation reported a loss per share of $1.10 per share in the third quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of $1.18.
In the year-ago quarter, the company posted earnings of 38 cents per share, driven by higher revenues.
Third-quarter 2024 revenues totaled $1 million, which missed the Zacks Consensus Estimate of $2 million. PRTA recorded revenues of $85 million in the third quarter of 2023 on the back of collaboration revenues from partner Bristol Myers Squibb.
Research and development (R&D) expenses decreased 12.4% year over year to $50.7 million, primarily due to lower manufacturing expenses.
General and administrative expenses amounted to $16.8 million, up from $16.6 million in the year-ago quarter, primarily due to higher personnel-related expenses.
As of Sept. 30, 2024, Prothena had $520.1 million in cash, cash equivalents and restricted cash, and no debt.
Pipeline Updates from PRTA
Prothena is evaluating PRX012 — a wholly owned investigational next-generation subcutaneous, single-injection once-monthly antibody delivered subcutaneously targeting a key epitope at the N-terminus of amyloid beta (Aβ) — for treating Alzheimer’s Disease (AD).
Initial phase I single ascending dose and multiple ascending dose data support once-monthly subcutaneous administration and ongoing evaluation in MAD cohorts.
Prothena has enrolled approximately 260 patients in the ongoing ASCENT clinical studies on PRX012. Prothena expects to report multiple clinical readouts starting mid-2025.
Prothena is advancing an early-stage pipeline of programs for several potential neurological indications with BMY.
BMS-986446 (formerly PRX005) is designed to be a best-in-class anti-tau, MTBR-specific antibody for the potential treatment of AD.
Bristol Myers continues to enroll in the ongoing phase II study on BMS-986446 in approximately 475 patients with early AD. The study is expected to be completed in 2027.
BMY is responsible for all development, manufacturing and commercialization of BMS-986446.
PRX019, a potential treatment of neurodegenerative diseases with an undisclosed target, is also being developed in collaboration with BMY. PRTA has initiated a phase I first-in-human clinical trial on PRX019 to evaluate the safety, tolerability, immunogenicity, and pharmacokinetics of single ascending and multiple doses in healthy adults.
Prothena is also developing a dual Aβ-Tau vaccine, PRX123, a potential prevention and treatment for AD. It is a dual-target vaccine targeting key epitopes within the N-terminus of Aβ and MTBR-tau, designed to promote amyloid clearance and block the transmission of pathogenic tau. The FDA cleared an investigational new drug application.
The regulatory body granted Fast Track designation to PRX123 for the treatment of AD. Prothena expects to update plans for the phase I study in 2025.
The company is evaluating prasinezumab, in collaboration with Roche, for the treatment of Parkinson’s disease (PD).
A phase II study, PASADENA, is being conducted by Roche in patients with early PD. Data from the study showed that patients taking prasinezumab continued to show reduced motor and functional progression compared with real-world data after four years.
Top-line results from the phase IIb PADOVA study, which has completed enrollment, are expected in the ongoing quarter.
Prothena is also evaluating birtamimab, a wholly-owned potential treatment for AL amyloidosis. PRTA reached a Special Protocol Assessment agreement with the FDA and initiated a confirmatory phase III AFFIRM-AL study of birtamimab in Mayo Stage IV patients with AL amyloidosis. Top-line results from the study are expected in the first half of 2025.
Novo Nordisk acquired Prothena’s clinical-stage antibody, Coramitug (formerly PRX004), a potential first-in-class amyloid depleter antibody for the treatment of ATTR amyloidosis with cardiomyopathy.
NVO is conducting an ongoing phase II study in patients with ATTR cardiomyopathy. The study has completed enrollment of approximately 99 patients and top-line data from the same is expected in the first half of 2025.
Reiterates 2024 Guidance
The company expects 2024 net cash burn from operating and investing activities to be in the range of $148-$160 million. Prothena expects year-end cash, cash equivalents and restricted cash midpoint to be approximately $468 million. Net loss for 2024 is projected to be in the $120-$135 million range.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Prothena 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 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 downward for the stock, and the magnitude of these revisions 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.
Performance of an Industry Player
Prothena belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Krystal Biotech, Inc. (KRYS), has gained 1.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Krystal Biotech reported revenues of $83.84 million in the last reported quarter, representing a year-over-year change of +879.4%. EPS of $0.91 for the same period compares with -$0.67 a year ago.
Krystal Biotech is expected to post earnings of $1.25 per share for the current quarter, representing a year-over-year change of +316.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Krystal Biotech has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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