Shares of Flexion Therapeutics (NASDAQ:FLXN) rose more than 18% today after the company announced first-quarter 2019 operating results. The business actually missed Wall Street estimates for revenue and loss per share, but analysts were pleased with progress in ramping up sales of the company's sole drug product.
Zilretta, an injection for management of osteoarthritis knee pain, generated revenue of $10.6 million in Q1 2019. That lagged just behind analyst estimates of $11 million, according to numbers compiled by Yahoo! Finance. But Flexion Therapeutics disclosed preliminary April sales of $5.1 million. That one-month total suggests a promising acceleration and puts the drug on pace to top analyst expectations for Q2 2019 revenue of $14.7 million.
As of 11:42 a.m. EDT, the stock had settled to a 14% gain.
Flexion Therapeutics had a difficult 2018. Shares fell 54.8% as the business struggled with a slow market launch for Zilretta compounded by issues with insurance reimbursement. Recent sales data provide hope that the drug is finally gaining market traction.
Management remains confident that the woes of last year are firmly behind the business. It reaffirmed full-year 2019 guidance for Zilretta revenue of $65 million to $80 million. That suggests a significant sales surge is on the way.
The operational performance in Q1 2019 is encouraging. The business delivered nearly $9 million in gross profit, which offset an equal increase in operating expenses. While Flexion Therapeutics is still generating significant operating losses, it had more than $217 million in available capital at the end of March. Therefore, successfully ramping up sales of Zilretta could begin to nudge the business toward profitability before cash runs out. Now the company just has to execute.