BioTech

Shares of Regulus Therapeutics Inc (NASDAQ:RGLS) Drop on Disappointing Q1 Earnings

Regulus Therapeutics Inc (NASDAQ:RGLS)

Regulus Therapeutics Inc (NASDAQ:RGLS) shares, traded on the Nasdaq under ticker RGLS, are down over 25% in early trading, and on heavy volumes, based on the company’s Q1 2017 earnings release. Regulus reported a Q1 $20 million loss which translates into a per share loss of (-$0.38). That was worse than the street expectation of a (-$0.33) EPS loss. Revenues were reported at $18,000. RGLS shares closed yesterday at $1.70 and gapped down to open at $1.20 this morning before hitting an inter-day low of $1.10. Shares have gained since then and, at the time of this writing, are trading on their inter-day high of $1.30. Volumes are heavy – over ten times their 30-day average daily trading figure.

Regulus Therapeutics Inc (NASDAQ:RGLS) shares have a 52-week low of $0.94. RGLS shares are trading almost 80% below their 52-week high of $6.25. Regulus Therapeutics Inc (NASDAQ:RGLS) has a market-cap of $93 million and, interestingly, has a listed cash per share figure of $1.39 which means that at current levels, RGLS shares are trading at a discount to the company’s cash reserves.

Sales for Regulus have been highly volatile. In 2012 the company reported sales of $12.7 million followed by annual sales figures of $19.6 million, $7.7 million, $20.8 million, and $1.2 million for 2016. Shareholders have experienced EPS losses every year since 2012 when the company reported an EPS loss of (-$2.12). Then followed annual EPS losses of (-$0.49), (-$1.29), (-$1.08), and (-1.55) for 2016. The bright spot for Regulus Therapeutics Inc (NASDAQ:RGLS) shareholders is that the company had paused significantly diluting shares. There were 51.41 million shares outstanding in 2015 and that number grew to just 52.81 million shares for 2016.

La Jolla, CA-based Regulus Therapeutics Inc (NASDAQ:RGLS) was formed in September 2007 by Alnylam Pharmaceuticals (Nasdaq: ALNY) and Isis Pharmaceuticals, now Ionis Pharmaceuticals (Nasdaq: IONS). The company develops medicines targeting microRNAs. More than 800 microRNAs have been identified in the human genome, and over two-thirds of all human genes are believed to be regulated by microRNAs. A single microRNA can regulate entire networks of genes. As such, these molecules are considered master regulators of the human genome. Targeting microRNAs with anti-miRs, chemically modified, single-stranded oligonucleotides, offers an approach to treating disease by modulating entire biological pathways and may become a new and major class of drugs with broad therapeutic application.

Seven firms follow Regulus Therapeutics. Four rate RGLS as a “Strong Buy”, one rates the shares as a “Buy” and two rate RGLS as a “Hold”. Their consensus price target for RGLA is $9.00. On January 30, 2017 analysts at both Needham and Wells Fargo downgraded the shares to “Hold” or “Market Perform”.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.

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James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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