Prothena (PRTA) Down 24.8% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Prothena (PRTA). Shares have lost about 24.8% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important drivers.

Prothena Q4 Loss Narrower Than Expected, Revenues Beat

Prothena reported a loss of 54 cents per share, narrower than the Zacks Consensus Estimate of a loss of 65 cents and the year-ago quarter’s loss of 56 cents.

Quarterly revenues came in at $0.26 million, surpassing the Zacks Consensus Estimate by 28%. Revenues were up from $0.2 million in the year-ago quarter. Revenues mainly came from the company’s collaboration with Roche Holdings.

Quarter in Detail

R&D expenses were $15.5 million, down from $16.5 million in the year-ago quarter due to lower clinical trial costs.

General and administrative (G&A) expenses came in at $8.1 million, slightly up from $8 million in the year-ago quarter.

As of Dec 31, 2019, Prothena had $378.4 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 later in 2020.

In December 2019, Prothena also reported interim data from the first-in-human dosing in a phase I clinical study of PRX004 in patients with hereditary ATTR (hATTR) amyloidosis. The candidate was found to be generally safe and well tolerated and demonstrated pharmacokinetic profiles consistent with that of an immunoglobulin gamma 1 (IgG1) monoclonal antibody. Additional data from the dose-escalation and long-term extension portions of the study are expected to be reported in 2020.

Prothena has a global neuroscience research & development collaboration with Bristol-Myers Squibb Company (NYSE:BMY) 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. Prothena initiated the cell-line development of a lead candidate in the preclinical tau program in the second quarter of 2019. The company also initiated the cell-line development of a lead candidate in the proprietary preclinical Aβ (Amyloid beta) program in the fourth quarter of 2019.

How Have Estimates Been Moving Since Then?

Estimates revision followed an upward path over the past two months. The consensus estimate has shifted 6.77% due to these changes.

VGM Scores

Currently, Prothena has a subpar Growth Score of D, a grade with the same score on the momentum front. 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

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