After the company reported mixed first-quarter financial results that were better than expected on the top line and worse than expected on the bottom line, shares in Antares Pharma (NASDAQ:ATRS) had tumbled 12.3% at 12 p.m. EST on Tuesday.
The healthcare company delivered robust revenue growth in Q1 because of Xyosted, a long-lasting testosterone drug, and Teva Pharmaceutical Industries' (NYSE:TEVA) generic version of Mylan's EpiPen, which uses Antares technology. Sales were $33.1 million, eclipsing industry watchers' estimates by $2.56 million and up 42.1% from the same quarter last year.
However, Antares' net loss of $0.01 per share in the quarter missed estimates by $0.01, which offset optimism despite being an improvement from a loss of $0.03 per share last year.
Also worrisome was that management removed full-year revenue guidance, citing lower new patient starts because of COVID-19 restrictions: "At this time, while we have seen a softening in new patient starts for our products, it is difficult to predict the full financial impact on our business given the current economic slowdown and uncertainty surrounding the duration of the pandemic. However, we believe the Company is in a strong financial position, allowing us to navigate through these unprecedented times while continuing to execute on our key strategic objectives supporting long-term growth," said Robert F. Apple, president and CEO.
The bigger-than-expected loss and pulled guidance aren't good news, but there are reasons for optimism.
An alternative to messy gels requiring daily application, Xyosted is taken weekly via an auto-injector. Total prescriptions grew 18% sequentially in Q1, resulting in sales of $9 million.
Additionally, sales of Teva's generic Epipen grew 13% sequentially on a 7% increase in market share, and as a result Antares partnership revenue improved 7.4% to $14.5 million last quarter.
Overall, COVID-19 creates uncertainty, but risk-tolerant investors might want to buy this weakness. Management was targeting sales of $135 to $155 million this year before removing guidance, so if sheltering in place eases and doctor visits normalize, the company's current $545 million market cap may undervalue the company's long-term opportunity.