Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) Reports $20.2 million Q1 Net Loss

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) has reported its financial results for the first quarter ended March 31, 2017. While commenting on the results, Achillion President and CEO Milind Deshpande, Ph.D. said the company successfully advanced ACH-4471, the first factor D inhibitor that is administered orally into Phase 2 development for PNH. He added that the company is still in the process of admitting patients into the study with the first patients having completed the 28 days of dosing. Patients are on a two-month therapy to access the safety and efficacy of the drug and the company hopes to report the results from the study within this quarter.

Dr. Deshpande says the company is in a better position to advance novel drugs that can help in addressing the unmet needs for patients around the world. Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) currently enjoys a robust balance sheet plus strategic global partnership with Janssen who has admitted patients for the Phase 2b OMEGA-1 clinical trial.

PNH is a life-threatening disease often characterized by destruction of red blood cells, formation of blood clots, impaired functioning of the bone marrow, and increased chances of contracting leukemia.

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) reported (-$20.2) million or (-$0.15) per share in net loss for the three months ended March 31, 2017. This compared to a net loss of (-$18.1) million or (-$0.13) per share that the company reported in the three months ended March 31, 2016. At the end of the quarter, the company had $386.6 million in cash, cash equivalents, interest receivable and marketable securities.

In the three months ended March 31, 2017, Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) reported $15.5 million in net research and development expenses compared to $13.3 million that was reported in the first quarter of 2016. The increase resulted from higher consulting costs and clinical trial fees related to ACH-4471 together with costs in preclinical and manufacturing activities related to the next generation factor D inhibitor compounds.

The company reported $5.7 million in general and administrative expenses in the first quarter of 2017 compared to $5.4 million that was reported at a similar period the previous financial year. The increase was due to higher consulting and legal fees.

During the quarter, Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) incurred $3.2 million in expenses towards non-cash stock compensation compared to the$3.0 million that was reported in the first quarter of 2016. This expenditure also covers research and development activities.

The company’s stock rose 16.67% to close at $4.41 on a volume of 5.74 million shares.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Why Did Shares Of Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) Plunge 9%?

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)

What caused shares of Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) to tank nearly 9% on Friday? The stock movement may be linked to a recent securities filing in which the company gave a notice of a plan to raise additional cash through the sale of new securities.

In a filing with the US Securities and Exchange Commission (SEC), Achillion informed the regulator of its intent to raise up to $250 million by securities offering. But it didn’t specify the nature, timing or pricing of the securities fundraiser. However, the market seems to believe the company is planning to dilute its stock, which could destroy value for existing shareholders. That may have sparked the selloff in the stock, which sent the shares down almost 9% on Friday to settle at $3.86.

Shares of Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) have retreated 6% year-to-date and are down more than 47% over the last one year.

Beating earnings

Before the issue of planned securities offering appeared to spoil the party, investors recently warmed up to shares of Achillion following the company’s a little upbeat 4Q2016 earnings. The company posted EPS loss of $0.03, better than EPS loss of $0.20 that analysts were expecting on the average. However, revenue of $15 million declined 52.5% year-over-year.

Though 4Q2016 may not have been the primary reason for investor optimism in Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN), the results offered hope of a bright future as the company continues to develop its pipeline. Additionally, several rating firms have recently commented positively on the prospects of Achillion.

For instance, Ladenburg Thalmann analysts initiated their coverage of Achillion with a BUY rating and 12-month price target of $10 on February 2. The analysts cited the company’s pipeline programs, and the various milestones and royalties bearing collaboration the company has with partners such as Johnson & Johnson (NYSE:JNJ)’s Janssen.

$900 million in potential milestones

The collaboration with Janssen involves development of a HCV drug and could yield more than $900 million in milestones for Achillion, and earn the company royalties in the range of mid-20%.

However, HCV is a highly competitive space and there can be no guarantee that Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) will hit the milestones and unlock the promised payments. The company’s planned securities fundraising could be a measure to raise additional funds that can be used to develop the pipeline so that the company doesn’t fall behind the competition in HCV and other product categories.

Ticker Symbol ACHN
Last Price a/o, 4:02PM EST  $                       3.86
Average Volume (mlns) 1.57
Market Cap (mlns)  $                   579.50
Sales (mlns) $31.60
Shares Outstanding (mlns) 150.13
Share Float (mlns) 118.17
Shortable Yes
Optionable Yes
Inside Ownership 0.10%
Short Float 9.03%
Short Interest Ratio 6.8
Quarterly Return -8.31%
YTD Return -6.54%
Year Return -43.65%

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: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.