Portola Pharma (PTLA) Misses Q1 EPS by 8c, Revenues Miss

Portola Pharma (NASDAQ: PTLA) reported Q1 EPS of ($0.88), $0.08 worse than the analyst estimate of ($0.80). Revenue for the quarter came in at $26.39 million versus the consensus estimate of $33.86 million.

Quarter Ending March 31, 2020, and Related Financial Results

• Total global revenues for the first quarter of 2020 were $26.4 million compared with $22.2 million for the same period in 2019. This includes $25.6 million in net product revenues from sales of Andexxa/Ondexxya [coagulation factor Xa (recombinant), inactivated-zhzo], and $0.8 million in collaboration and license revenues.
• Net loss attributable to Portola for the first quarter of 2020 was $68.8 million, or $0.88 net loss per share, compared with $78.2 million, or $1.17 net loss per share, for the same period in 2019.
• Total operating expenses for the first quarter of 2020 were $84.8 million, including $9.5 million in stock-based compensation, compared with $95.8 million for the same period in 2019. Included in total operating expenses was a stock-based compensation expense of $9.5 million for the first quarter of 2020, compared with $17.9 million, including one-time equity valuation for a manufacturer of $5.8 million, for the same period in 2019.
• Research and development (R&D) expenses for the first quarter of 2020 were $26.1 million compared with $35.6 million for the same period in 2019. Included in R&D expenses was a stock-based compensation expense of $2.6 million for the first quarter of 2020, compared with $10.1 million, including one-time equity valuation for a manufacturer of $5.8 million, for the same period in 2019.
• Selling, general and administrative (SG&A) expenses for the first quarter of 2020 were $54.4 million compared with $53.0 million for the same period in 2019. Included in SG&A expenses was a stock-based compensation expense of $6.9 million for the first quarter of 2020, compared with $7.8 million for the same period in 2019.
• Cost of sales (COS) for the first quarter of 2020 was $4.3 million compared with $7.2 million for the same period in 2019.

"2020 started strong with January representing our highest month of Andexxa demand in the U.S. since launch, driven in part by a return of growth in our tier one accounts," said Scott Garland, Portola's president and chief executive officer. "While encouraging, the emergence of the COVID-19 pandemic impacted our revenue in March and the quarter due to three main factors. First, market research and customer feedback indicate that shelter-in-place restrictions issued by over 40 states have led to fewer patients coming into emergency departments. Second, most healthcare systems shifted their focus to preparing for and addressing COVID-19 patients, which impacted the number of new accounts added in the quarter. Finally, on March 13, we suspended face-to-face field interactions with healthcare providers. Despite these challenges, we continue to execute on our growth drivers and make progress with virtual meetings and education programs to highlight the value proposition of Andexxa, including recently presented clinical data."

As previously announced on May 5, 2020, Portola entered into a definitive merger agreement to be acquired by Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN). Under the terms of the merger agreement, a subsidiary of Alexion will commence a tender offer to acquire all of the outstanding shares of Portola common stock at a price of $18 per share in cash. The tender offer is subject to customary conditions, including the tender of a majority of the outstanding shares of Portola common stock, the expiration or termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976 and receipt of certain other regulatory approvals. Following successful completion of the tender offer, Alexion will acquire all remaining shares not tendered in the offer at the same price of $18 per share in cash through a merger. The transaction is expected to close in the third quarter of 2020.

Updated 2020 Annual Financial Guidance

Portola is reducing its 2020 operating expenses by approximately $50 million. For the fiscal year 2020, Portola is updating its guidance for R&D and SG&A expenses. Portola now expects GAAP R&D expenses to be between $90 million and $105 million, including stock-based compensation expenses of approximately $15 million, a decrease of $15 million from the prior guidance range of $105 million and $120 million. Portola now expects GAAP SG&A expenses to be between $200 million and $215 million, including stock-based compensation expenses of approximately $38 million, a decrease of $35 million from the prior guidance range of $235 million and $250 million. This updated guidance reflects near-term cost containment measures to extend the cash runway as Portola navigates the COVID-19 pandemic.

With the uncertainty around the duration of COVID-19 impacts, Portola is suspending prior guidance provided during its fourth quarter 2019 call for approximately 350 new hospital adds in 2020.

For earnings history and earnings-related data on Portola Pharma (PTLA) click here.

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Engine Capital urges H.B. Fuller to explore BAS and full sale
• Software M&A heats up: Which SaaS stocks could be next for private equity?