Epizyme (EPZM) Reports Narrower-than-Expected Loss In Q3

Epizyme, Inc. (NASDAQ:EPZM) reported a loss of 63 cents per share in the third quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 65 cents but wider than the year-ago loss of 42 cents.

So far this year, the stock has gained 33.5% compared with the industry’s growth of 2.7%.

Quarter in Detail

With no approved products in its portfolio as of yet, Epizyme relies heavily on its collaborators for revenues. The company did not earn any revenue in the quarter compared with $6.6 million in the year-ago quarter as there were no collaboration milestones. However, the Zacks Consensus Estimate for the third- quarter revenues was pegged at $4 million.

Research and development (R&D) expenses increased 20.1% year over year to $28.7 million. The improvement was primarily owing to the increased tazemetostat manufacturing activities, along with its clinical development and research activities related to advancing the company’s next development program.

General and administrative (G&A) expenses were $9.3 million in the quarter, up 24% from the year-ago quarter. The uptick was backed by increased personnel-related expenses to support the company’s growth and pre-commercial activities.

Epizyme had $307.2 million of cash, cash equivalents and marketable securities as of Sep 30 compared with $263.3 million as of Sep 30, 2016. The increase was driven by the $151.3 million in net proceeds following the company’s underwritten public offering of 10,557,000 shares of common stock.

The company also expects that this balance as of Sep 30, 2017, will be sufficient to fund its planned operations into at least the third quarter of 2019.

Pipeline Update

Epizyme expects to have its first interaction with the FDAto begin the registration strategy for its lead pipeline candidate, tazemetostat, in non-Hodgkin lymphoma (NHL) in the fourth quarter of 2017 and plans to provide an update in early 2018.

In fact, the company also expects to report data from its ongoing phase II study designed for evaluating tazemetostat as a treatment for adults with mesothelioma characterized by BAP1 loss-of-function.

Meanwhile, Epizyme continues to enroll and monitor patients in malignant rhabdoid tumor cohort and other INI1-negative tumor cohort of the its ongoing phase II study in molecularly defined solid tumors. The updated data from this study are expected to be presented in 2018. The company has also added a separate cohort to enroll adults with chordoma, due to the high rate of enrollment of these patients in the other INI1-negative cohort and the observed clinical activity with tazemetostat in this tumor type in both adults and children so far.

Zacks Rank & Key Picks

Epizyme holds a Zacks Rank #2 (Buy). Some other top-ranked health care stocks in the same space include Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) , Agenus Inc. (NASDAQ:AGEN) and Adaptimmune Therapeutics plc (NASDAQ:ADAP) . While Ligand sports a Zacks Rank #1 (Strong Buy), Agenus and Adaptimmune carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up $3.68 to $3.70 for 2018 over the last 30 days. The company pulled off positive earnings surprises in two of the trailing four quarters, with an average beat of 6.19%. The share price of the company has increased 41.8% year to date.

Agenus’ loss per share estimates have narrowed from $1.40 to $1.36 for 2018 over the last 30 days. The company delivered positive earnings surprises in three of the trailing four quarters, with an average beat of 4.27%.

Adaptimmune’s loss per share estimates have narrowed from $1.03 to 95 cents for 2017 and from 95 cents to 90 cents for 2018 over the last 60 days. The company came up with positive earnings surprises in two of the trailing four quarters, with an average beat of 2.56%. The share price of the company has increased 85.4% year to date.

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