Ophthotech (OPHT) Q4 Earnings Beat, Gene Therapy In Focus

Ophthotech Corporation (NASDAQ:OPHT) reported loss of 26 cents per share for the fourth quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 58 cents as well as a loss of $1.86 in the year-ago quarter.

With no approved products in its portfolio, Ophthotech derives revenues from milestone and other payments under collaborations. However, the company did not generate any revenues in the quarter. The Zacks Consensus Estimate was $0.8 million. The company had reported $5.3 million in revenues in the year-ago period.

Shares of the biotech company closed 1.2% lower on Tuesday Ophthotech’s shares have underperformed the industry in the last three months. Specifically, the company’s shares have lost 31.4% whereas the industry registered a decrease of 3.4%

The company has initiated an innovative gene therapy program to discover and develop new treatments for ocular disease. Ophthotech has plans to evaluate promising gene therapy product candidates in collaborations with leading companies and academic institutions.

Quarter in Detail

Research and development expenses in the fourth quarter decreased 86.7% to $7.9 million, mainly due to termination of the Fovista development programs in wet AMD.

General and administrative expenses decreased 46.9% from the year-ago period to $6.9 million due to lower personnel and infrastructure cost.

2017 Results

Ophthotech reported revenues of $210 million from its collaborations, up 312.6% year over year. The significant year-over-year increase in revenues is mainly attributed to recognition of deferred revenues related to completion of deliverables required under Ophthotech’s licensing and commercialization agreement with Novartis (NYSE:NVS) .

For the full year, the company reported earnings of $3.17 against a loss of $5.45 in the year-ago period.

Research and development expenses decreased 66.2% to $66.3 million, while general and administrative expenses decreased 28.9% from the year-ago period to $35.7 million.

Pipeline Update

With the termination of Fovista development, following its failure in three pivotal phase III studies, the company is focused on Zimura development programs. The company is developing Zimura in dry and wet AMD, Stargardt disease andidiopathic choroidal vasculopathy (“IPCV”).

In the quarter, the company initiated a phase IIa study on Zimura in combination with Regeneron Pharmaceuticals’ (NASDAQ:REGN) Eylea in IPCV. Top-line data is expected in the second half of 2019.

In the third quarter, the company had modified its ongoing phase IIb study, evaluating Zimura in Geographic Atrophy (“GA”), a severe form of dry AMD, to reduce the anticipated time to achieve the primary endpoint of mean rate of change in GA. Moreover, Ophthotech also initiated a dose determining phase IIa study, evaluating Zimura in combination with Roche’s (OTC:RHHBY) Lucentis in patients with wet AMD. Top-line data from the study is expected in late 2018.

Subsequent to the quarter in January 2018, the company initiated a phase IIb study on its complement c5 inhibitor candidate, Zimura, evaluating it in autosomal recessive Stargardt disease (STGD1). Top-line data is expected in 2020.

Cash Balance

Ophthotech’s cash balance was $167 million as of Dec 31, 2017.

The company provided its expectation of cash burn to fund its operations in 2018 to be in the range of $50 million to $55 million.

Ophthotech Corporation Price, Consensus and EPS Surprise

Ophthotech Corporation Price, Consensus and EPS Surprise | Ophthotech Corporation Quote

Zacks Rank

Ophthotech carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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