ARIAD's Q1 Loss Narrows

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ARIAD Pharmaceuticals Inc. (ARIA) reported first quarter 2014 loss of 27 cents per share, narrower than the Zacks Consensus Estimate of a loss of 32 cents per share and the year-ago loss of 36 cents per share.

First quarter revenues increased 82.3% from the year-ago quarter to $11.8 million, surpassing the Zacks Consensus Estimate of $10 million.

The Quarter in Detail

In the reported quarter, Iclusig generated sales of $8 million, up 25% from the year-ago quarter. Iclusig sales were $4.7 million in the U.S., post its re-launch in mid-Jan after undergoing a temporary suspension in Oct 2013.

On the first quarter call, ARIAD said that it has completed the transition of patients from the IND and sIND programs to commercial supply of Iclusig. According to the company, 76% of the sIND patients are currently receiving Iclusig, a majority of whom are suffering from advanced phase or blast phase chronic myeloid leukemia (CML.TO) or Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ ALL). At the end of the first quarter, the company reported 300 prescribers of Iclusig (as against 742 prescribers in 2013). Meanwhile, 400 unique patients are receiving Iclusig commercially. ARIAD said that patients are being administered lower doses of Iclusig which should have a positive impact on compliance and continuation of therapy.

As far as the EU is concerned, Iclusig is currently being sold in several countries with additional launches in 16 countries expected through the course of 2014. During the first quarter of 2014, Iclusig was commercialized in the Nordic countries and Switzerland. ARIAD expects most of the pricing approvals in the EU in the second half of 2014.

R&D expenses decreased 30.8% year over year to $28.6 million. This was primarily due to the FDA’s partial clinical hold on certain studies and the discontinuation of the EPIC study on Iclusig in Oct 2013.

SG&A expenses increased 7.2% year over year to $31.6 million. This increase was primarily due to higher investment in the re-launch of Iclusig in the U.S., wider commercialization of Iclusig in the EU and related activities.

Pipeline Updates

In the reported quarter, ARIAD started a phase II pivotal study (ALTA) to evaluate the safety and efficacy of AP26113 in refractory and locally advanced or metastatic non-small cell lung cancer (:NSCLC) patients (including those with brain metastasis) with positive anaplastic lymphoma kinase (ALK+) oncogene, who had previously been treated with Pfizer’s (PFE) Xalkori (crizotinib).  

Meanwhile, enrolment in five investigator-sponsored studies on Iclusig will resume.

ARIAD intends to present data from the phase II study on Iclusig in patients suffering from refractory gastrointestinal stromal tumors (:GIST) and the discontinued EPIC study at the American Society of Clinical Oncology (TATD) in June. ARIAD expects the partial hold on the phase II study on Iclusig for GIST patients to be withdrawn in the second quarter of 2014.

ARIAD currently carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the health care sector include Enanta Pharmaceuticals, Inc. (ENTA) and Spectrum Pharmaceuticals, Inc. (SPPI). Both carry a Zacks Rank #1 (Strong Buy).

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