Array BioPharma (ARRY) Q3 Earnings and Sales Beat Estimates

Array BioPharma Inc. ARRY reported a loss of 17 cents per share for the third quarter of fiscal 2019, which was narrower than the Zacks Consensus Estimate of loss of 21 cents. However, loss widened 54.4% from the year-ago figure due to higher operating expenses.

Total revenues in the quarter fell 2.5% year over year to $64.7 million primarily due to significant decline in collaboration and license revenues, partially offset by product revenues. However, revenues beat the Zacks Consensus Estimate of $51.5 million. The company did not have any marketed product in the year-ago period and hence did not record any product revenues.

Shares of Array BioPharma fell almost 3.4% on May 7 despite the earnings and revenue beat. The stock has increased 56.6% so far this compared with the industry’s rally of 3.2%.

Quarter in Detail

Net product sales, completely from Braftovi-Mektovi combination therapy, in the reported quarter increased 54.6% sequentially to $35.1 million. The combination regimen continues its strong launch uptake into its third commercial quarter. In June 2018, Braftovi plus Mektovi therapy was approved for treating unresectable or metastatic melanoma with a BRAF V600E or V600K mutation.

In February, the therapy was approved in Japan for unresectable melanoma with a BRAF mutation. In March, the National Comprehensive Cancer Network (“NCCN”) updated its guidelines to include Braftovi and Mektovi plus Lilly’s (LLY) chemotherapy, Erbitux, as a recommended treatment for BRAF-mutated metastatic colorectal cancer (mCRC) in second- or third-line setting.

Collaboration and license revenues plunged 53.2% year over year to $19.5 million compared to the year-ago quarter. The plunge was primarily due to the recognition of the Vitrakvi milestones in the prior quarter

Reimbursement revenues were $9.2 million in the third quarter of fiscal 2019 compared with $24.8 million in the year-ago quarter. The company records amounts paid by Novartis related to development and commercialization of Braftovi and Mektovi related to asset transfer agreements as reimbursement revenues. The significant decrease in reimbursement revenues was due to lower activity in the clinical studies transitioned from Novartis.

The company recorded product royalties of $0.9 million during the quarter. There were no such revenues in the year-ago quarter. The company is eligible to earn royalties on sales of Braftovi and Mektovi regimen in Europe and Japan from its commercial partners Pierre Fabre and Ono, respectively.

Selling, general and administrative (SG&A) expenses surged 111.9% to $35.5 million due to higher costs to support commercial activities of Braftovi-Mektovi combination therapy.

Research and development (R&D) expenses decreased 8.1% to $65.5 million, mainly due to lower expenses related to the company’s proprietary clinical studies including the BEACON CRC study.

Pipeline Updates

In January, the company announced median overall survival data from the phase III BEACON CRC study, evaluating Braftovi and Mektovi plus Erbitux for mCRC, which stood at 15.3 months in mCRC patients with BRAF V600E mutation.

During the quarter, the company amended the protocol of the BEACON CRC study to include an interim analysis of study endpoints based on inputs from the FDA and European Medicines Agency. Encouraging interim data may form the basis for accelerated approval of the combination regimen for treating mCRC.

A phase II study – ANCHOR CRC – is evaluating the same combination regimen in first-line mCRC. The company also has immuno-oncology study collaborations with Bristol-Myers BMY, Merck MRK and Pfizer PFE. Additional new clinical studies started in April to evaluate Braftovi and Mektovi in BRAF V600 mutant melanoma brain metastases and non-small cell lung cancer (“NSCLC”).

Array BioPharma Inc. Price, Consensus and EPS Surprise

 

Array BioPharma Inc. Price, Consensus and EPS Surprise | Array BioPharma Inc. Quote

Zacks Rank

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

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
Pfizer Inc. (PFE) : Free Stock Analysis Report
 
Bristol-Myers Squibb Company (BMY) : Free Stock Analysis Report
 
Array BioPharma Inc. (ARRY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research