It has been about a month since the last earnings report for Ultragenyx (RARE). Shares have lost about 0.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ultragenyx due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ultragenyx Q3 Earnings Miss Estimates, Revenues Up Y/Y
Ultragenyx incurred a loss of $2.43 per share, wider than the Zacks Consensus Estimate of a loss of $2.29. The company reported a loss of $1.08 per share in the year-ago quarter.
Including the acquisition expenses incurred to acquire GeneTx, the company incurred a loss of $3.50 per share in third-quarter 2022.
Total revenues amounted to $91 million in the third quarter, up 11.1% year over year. The top line missed the Zacks Consensus Estimate of $99 million.
Quarter in Detail
Crysvita’s total revenues were $70 million, up 27.1% year over year, driven by increased demand for approved indications. Crysvita revenues in Ultragenyx territories rose 28.2% to $64.5 million in the third quarter and included $51.3 million from the North America profit share territory and $13.2 million of net product sales for the drug in other regions. Total royalty revenues related to the sales of Crysvita in the European region were $5.4 million. Ultragenyx sold its Crysvita rights in the European territory to Royalty Pharma in December 2019.
Mepsevii product revenues were $6 million in the third quarter compared with $3.9 million reported in the year-ago quarter. Dojolvi product revenues were $13.3 million compared with $10.7 million in the year-ago quarter, driven by strong new patient demand.
Operating expenses increased 84% to $315.8 million in the third quarter. Operating expenses for the reported quarter include research and development expenses of $237.3 million, selling, general and administrative expenses of $69.8 million and $75.2 million spent to acquire GeneTx.
2022 Guidance
Ultragenyx reaffirmed the guidance it had provided earlier this year. The company expects Crysvita revenues in the range of $250-$260 million in Ultragenyx territories. Dojolvi revenues are expected to be in the range of $55-$65 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Ultragenyx has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ultragenyx has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ultragenyx is part of the Zacks Medical – Biomedical and Genetics industry. Over the past month, Exelixis (EXEL), a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended September 2022 more than a month ago.
Exelixis reported revenues of $411.74 million in the last reported quarter, representing a year-over-year change of +25.4%. EPS of $0.31 for the same period compares with $0.12 a year ago.
For the current quarter, Exelixis is expected to post a loss of $0.05 per share, indicating a change of -117.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -68.6% over the last 30 days.
Exelixis has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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