Micromet Inc.’s (MITI ) fourth quarter 2010 loss per share came in at 17 cents (including special items), narrower than the year-ago loss of 34 cents per share. After adjusting for the change in fair value of warrants, the company reported a loss per share of 11 cents, less than the year-ago post adjustment loss of 34 cents per share.
The Zacks Consensus Estimate had pegged the loss at 15 cents per share. The lower loss over the prior year was attributable to an increase in revenues and a fall in operating expenses.
For full year 2010, reported loss per share came in at 56 cents, narrower than the year-ago loss of 98 cents per share and the Zacks Consensus Estimate of 68 cents. After adjusting for the change in fair value of warrants, Micromet reported a loss per share of 52 cents, less than the year-ago post adjustment loss of 85 cents per share. Total revenue was $28.7 million, ahead of the prior-year revenue of $21 million and the Zacks Consensus Estimate of $27 million.
Quarterly Details
Revenues at Micromet climbed approximately 100% to $9.2 million in the fourth quarter of 2010. The rise was attributable to receipt of a milestone payment of $3.4 million from partner Bayer (BAYRY). Revenues also surpassed the Zacks Consensus Estimate of $8 million for the fourth quarter of 2010.
Operating expenses during the reported quarter fell approximately 30% over the prior-year period to $19.9 million. The fall was attributable to the reduction in research and development expenses (down 41.0%), which offset the 22% increase in general and administrative expenses.
Pipeline Update
The lead pipeline candidate at Micromet is blinatumomab.
In September 2010, Micromet commenced a European phase II trial of blinatumomab in adults suffering from relapsed or refractory B-precursor acute lymphoblastic leukemia (ALL). The company will use data from this study to design a pivotal trial expected to start in 2012, which will form the basis of the global registration of blinatumomab for this indication. Micromet expects to complete enrollment in the phase II European trial in the second half of 2011. Interim data from the trial is expected to be presented at a scientific meeting in June this year.
Micromet is conducting a pivotal study, BLAST, on blinatumomab in Europe in adults with minimal residual disease (MRD) positive B-precursor ALL, also referred to as front-line ALL. Enrollment in the trial is expected to complete in 2012 and data from the trial is expected to support a marketing authorization for the indication in Europe.
Micromet also plans to start a phase I/II trial in pediatric and adolescent patients with ALL in late stage in both the US and EU in mid 2011.
Apart from ALL, blinatumomab has potential in a variety of other blood cancers, which represent a multi-billion dollar opportunity. It is being studied in a phase I clinical trial for the treatment of patients with non-Hodgkin’s lymphoma (NHL).
We believe the successful development and commercialization of blinatumomab will be a major boost for the company.
Our Recommendation
Currently, we have a neutral long-term stance on Micromet, which is supported by a Zacks #3 Rank (short-term Hold recommendation) carried by the company. Micromet posted impressive results in the fourth quarter of 2010 and provided an encouraging pipeline update. However, we believe that investor focus will be more on the development of lead candidate blinatumomab rather than earnings performance.
We believe that Micromet requires the strength of a large established player to accelerate blinatumomab’s development in order to gain a head-start over potential competitors. We are also concerned about its early stage pipeline. We prefer to remain on the sidelines till further visibility is obtained on the pipeline development at Micromet.
BAYER A G -ADR (BAYRY): Free Stock Analysis Report
MICROMET INC (MITI): Free Stock Analysis Report
Zacks Investment Research
