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Aerie (AERI) Incurs Lower Loss in Q1, Launches Rhopressa


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Aerie Pharmaceuticals, Inc. AERI reported first-quarter 2018 loss of 83 cents per share, narrower than the Zacks Consensus Estimate of a loss of 89 cents but wider than the year-ago loss of 62 cents.

Aerie Pharmaceuticals, Inc. Price and Consensus

Aerie Pharmaceuticals, Inc. Price and Consensus | Aerie Pharmaceuticals, Inc. Quote

Quarter in Detail

In December 2017, Aerie's lead drug Rhopressa was approved by the FDA for the reduction of elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension. This approval came two months ahead of the scheduled Prescription Drug User Fee Act date of Feb 28, 2018. The launch is underway.

In the reported quarter, research and development expenses increased 10.6% to $10.9 million. Selling, general and administrative expenses surged to $21.1 million from $10.7 million in the year-ago quarter.

Also, higher operating expenses in the first quarter of 2018 as compared to the first quarter of  2017 is primarily due to increased activities associated with the expansion of the employee base to support the growth of operations, and preparatory activities associated with Rhopressa commercialization efforts.

Aerie is securing formulary contracts to enable commercial coverage in 2018 and Medicare Part D coverage in 2019. The company expects preferred formulary coverage for the majority of commercial plans by the end of 2018, and preferred formulary coverage for the majority of Medicare Part D plans commencing in 2019.

Pipeline Updates

Aerie is currently evaluating its second candidate, Roclatan, a once-daily, quadruple-action fixed-dose combination of Rhopressa and Xalatan. The NDA for Roclatan is expected to be filed in second-quarter 2018.  The company initiated a phase III trial, Mercury 3, in the third quarter of 2017 to prepare for regulatory submission in Europe. The trial is a non-inferiority trial comparing Roclatan with prescribed fixed dose combination of Ganfort.

Meanwhile, pre-IND activities are well underway for the further development of Aerie's retina program candidates, including AR-13503 (Rho kinase and Protein kinase C inhibitor implant) and AR-1105 (dexamethasone steroid implant).

Outlook

Aerie expects Rhopress revenues in the range of $20-$30 million in 2018. Total cash burn is projected in the range of $200-$210 million.

Our Take

Aerie reported a narrower-than-expected loss in the first quarter.

Aerie received a significant boost with the approval of lead candidate which will significantly boost its prospects as glaucoma is one of the largest segments in the global ophthalmic market.

Aerie's share price has outperformed the industry over the last 12 months. The stock has gained 24.5% compared with the industry 's upside of 1.7%.

However, Aerie faces a stiff competition from established, branded and generic pharmaceutical companies' drugs such as Novartis' NVS Simbrinza and Travtan, and Allergan's AGN Lumigan as well as products of other smaller biotechnology and pharmaceutical giants. Valeant Pharmaceutical's VRX Vyzulta is also approved for an open-angle glaucoma or ocular hypertension. Rhopressa will have a tough time in gaining market share due to competition from these products.

Zacks Rank

Aerie carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: AGN , NVS , AERI



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