Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) Slumps 22%

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) shed 22.098% in market value after Johnson & Johnson (NYSE:JNJ) provided notice, for termination of a licensing and collaboration pact on the development of Hepatitis C drugs. The decision comes on the heels of the company’s subsidiary Janssen Pharmaceuticals discontinuing the development of investigational hepatitis C treatment regimen JNJ-478.

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)
One month ACHN stock price chart

Achillion Pharmaceuticals Big Loss

The news brought an end to the bullish run that had pushed Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) to the $5 per share mark. The stock has since gapped lower and traders are waiting to see if the trend will continue as it sits at a key support level. A close below the $3.70 level could see the stock end up at the $3.25 mark, which is this year’s low.

“We are disappointed by Janssen’s decision to discontinue HCV development given the positive data presented in phase 2a with JNJ-41781, demonstrating a 100% cure rate after only six weeks of therapy,” stated Milind Deshpande, Ph.D., President and Chief Executive Officer of Achillion

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) could come under pressure given what is at stake with the termination of the collaboration agreement with Johnson & Johnson. Under the terms of a deal reached in 2015, the company was entitled to $1.1 billion in clinical, regulatory, and sales milestones of hepatitis C drugs under development.

Johnson & Johnson (NYSE:JNJ) acquired $225 million worth of Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) as part of the deal reached in 2015. It now awaits to be seen if the giant pharmaceutical company will sell its 18,367,346 shares in addition to ending the collaboration.

When Johnson and Johnson entered into a licensing and collaboration agreement with Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN), there were few Hepatitis C Drugs in the market. Fast forward and things have drastically changed as patients now have multiple treatment options.

Achillion Big Plan

The end of potential Hepatitis C revenue is bad news for Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) and one of the reasons why the stock felt the wrath of the street. However, the company has also redefined its research and development pipeline as it sought to reduce its reliance on the partnership.

ACH-4471 is the company’s lead drug candidate as it looks for opportunities for the treatment of paroxysmal, a rare disease that destroys red blood cells. Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) had a strong balance sheet of $370 million, as of the end of June, which is more than sufficient to finance clinical programs even with the termination of the Johnson & Johnson pact.

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.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Why Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) Stock Broke Resistance

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) stock price is up over 22% after the biotechnology company announced positive interim results for its drug candidate, ACH-4471. Also today the company reported financial results for the most recent quarter and six months. By 12:40 PM EST, ACHN shares had a volume of over 20 million shares, far exceeding their daily average of 1.5 million.

As of market close yesterday, ACHN shares were down YTD, but after news of the interim clinical trial results, ACHN stock gapped up to open at $4.70 then proceeded to blast through resistance just above $5.00. Shares of ACHN then hit an inter-day high of $5.66 before sellers came in and pushed the shares back below the $5.00 level. Analysts have given ACHN stock a price target of $6.75.

ACHN stock chart:

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)
Six month stock price chart for Achillion ACHN

Achillion Pharmaceuticals Reports Interim Results

Achillion Pharmaceuticals released interim data from ongoing ACH-4471 trials that indicated the drug candidate had achieved clinically meaningful complement inhibition and demonstrated a favorable tolerability profile with no reports of clinically meaningful increases in liver enzymes. In this initial set of data, ACH-4471 improved LDH, hemoglobin, fatigue score, and other measures of response including PNH clone size. These interim results support Achillion’s global expansion plans for PNH clinical trials.

Achillion Pharmaceuticals Financial Report

For Q2 2017, Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) reported a net loss of (-$22.5) million or (-$0.16) per share, compared with a net loss of $18.5 million or $0.14 per share for the second quarter of 2016. Cash, cash equivalents, marketable securities, and interest receivable as of June 30, 2017 were $369.9 million. Research and development expenses were $18.3 million compared with $14.2 million for the same period of 2016. The increase was primarily due to increased ACH-4471 clinical trial costs as well as increased manufacturing costs for ACH-5228. SG&A expenses were $5.4 million, compared with $5.2 million for Q2 2016. The increase was primarily due to increased legal and consulting fees.

For the six months ended June 30, 2017, Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)’s net loss was $42.7 million, compared to a net loss of $36.6 million for the first half of 2016. R&D totaled $33.8 million, compared with $27.4 million for the same period in 2016.

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.

Don’t miss out! Stay informed on $ACHN and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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.