Prothena Corporation (PRTA) , the drug discovery business that was spun-out of Elan Corp. (ELN) in December last year, reported its financial results for the second quarter ended June 30 after Monday’s closing bell. Prothena’s business consists of a substantial portion of Elan’s former drug discovery business platform, including Neotope Biosciences Limited and Onclave Therapeutics Limited, each former wholly owned subsidiaries of Elan.
Two weeks ago, it was announced that Elan, which was effectively a holding company after the spin-out, was being acquired by Perringo Co. (PRGO) for about $8.6 billion.
Prothena is still in very early stages with its pipeline with the most advanced antibody program in development being NEOD001 for AL Amyloidosis, which started a Phase I trial last quarter. PRX002 for Parkinson’s Disease and PRX003 for inflammatory disease and metastatic cancer are both in pre-clinical research with intentions of bringing one or both of them to the clinic in the next two years. Additional antibodies complete the pipeline with potential for development in the Alzheimer’s disease and diabetes spaces.
For the quarter, the Dublin, Ireland-based company reported revenue from related parties of $167,000, down from $735,000 in the year prior quarter. Net loss expanded to $11.3 million, or 64 cents per share, compared to $9.7 million, or 67 cents per share, in the second quarter last year. Last year’s figures were calculated using 14.5 million fully-diluted shares, even though the company did not exist as an independent company. 14.5 million shares were issued to Elan shareholders in connection with the separation from Elan. 3.2 million more shares were purchased by Elan up separation, bringing Prothena’s current total to 17.7 million.
Research and development expenses increased slightly to $8.15 million compared to $8.02 million last year. General and administrative costs jumped from $2.43 million to $3.21 million.
The quarter ended with Prothena having $112.5 million in cash and cash equivalents and no outstanding debt. Cash burn for the rest of 2013 is anticipated to leave the company with about $88 million at the end of the year.
Per the spin-out, Elan provided Prothena with $125 million in cash, which is expected to last until June 30, 2015.
"We were productive in the second quarter as we continued to advance our pipeline of novel therapeutic antibodies," said Dr. Dale Schenk, president and chief executive at Prothena. Schenk said he expects results from the NEOD001 Phase 1 clinical trial during 2014.
Shares of PRTA trudged sideways throughout the first quarter, but have found strength since the beginning of April, appreciating about 140 percent as of Monday’s close at $16.26. Given the early stage of the company’s pipeline, it’s the fat bank account that seems to be keeping investors happy as showcased by a nearly $300 million market capitalization. This definitely gives the company a little bit of an “all or nothing” flavor, as after all, there aren’t many biotechs sitting there with that type of loot to support the valuation and a pipeline that just sent its first drug into clinical trials.