Allos Narrows Loss - Analyst Blog
March 07 2012 - 3:15AM
Zacks
Allos Therapeutics
Inc.’s (ALTH) suffered a loss of 1 cent as opposed to a
loss of 17 cents per share incurred in the year-ago quarter. A
surge in revenues coupled with lower costs led to the narrower loss
in the final quarter of 2011. The Zacks Consensus Estimate hinted
at a loss of 8 cents per share.
Quarterly
Results
Total revenues in the reported
quarter climbed 44.4% to $16.9 million. Net product sales at Allos
climbed 17% sequentially and 31.6% year over year to $15.4 million
(including some infrequently occurring items). Excluding those
items, net product sales grew 8% sequentially to $11.0 million.
Allos derives its product revenues
from selling Folotyn for treating patients with relapsed or
refractory peripheral T-cell lymphoma (PTCL). License and other
revenues pertaining to the Mundipharma deal for the co-development
of Folotyn accounted for the balance. The Zacks Consensus Estimate
was $16 million. Both selling, general and administrative
(SG&A) and research & development (R&D) expenses were
on the downswing during the quarter, declining 47.2% and 44.5% due
to the company’s prudent cost management strategy.
Annual Results
For full year 2011, Allos suffered
a loss of 24 cents as opposed to the year-ago loss of 74 cents.
Higher revenues (up 130% to $81 million) and lower costs (down 6.6%
to $106.7 million) led to the narrower loss in 2011. The Zacks
Consensus Estimate for 2011 hinted at a loss of 36 cents on
revenues of $72 million.
Allos exited 2011 with $97.8
million in cash, cash equivalents and investments and no debt as
opposed to a cash balance of $109.5 million and zero debt at the
end of the third quarter of 2011.
Forecast for
2012
Allos expects revenues from Folotyn
sales in the range of $50-$55 million for 2012 (up 16%-28% over
2011 levels excluding infrequent items). For 2012, R&D expenses
(excluding non-cash stock-based compensation expense) are projected
to be approximately $27 million for 2012 (up 42% from 2011 levels)
as Allos continues to develop Folotyn for other indications.
For 2012, SG&A expenses
(excluding non-cash stock-based compensation expense), are
projected to be approximately $48 million (down 20% from 2011
levels). The reduction is primarily due to the expected fall in
personnel and other costs. Allos expects license and other revenue
from the Mundipharma agreement to be approximately $9 million in
2012.
Our
Recommendation
Currently, we have a long-term
recommendation of Neutral on Allos. We believe that Allos must
reduce its dependence on Folotyn and develop additional products to
sustain growth. We see limited upside potential until Allos is
successful in expanding its product portfolio. The stock carries a
Zacks #3 Rank (Hold rating) in the short-run.
ALLOS THERAPEUT (ALTH): Free Stock Analysis Report
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