Shares of Paratek Pharmaceuticals (PRTK) were sinking 10.9% as of 11:46 a.m. EDT on Wednesday. The big decline came after the company announced that it's lowering its 2021 revenue outlook by around $38 million following discussions with the Biomedical Advanced Research and Development Authority (BARDA).
You might not think that a revenue outlook cut of $38 million is a big deal. So why did the biotech stock drop so much? That's a significant amount for Paratek. The company reported revenue of only $16.4 million in the first quarter of 2020.
Paratek said that after talking with BARDA, "the timing of future procurements [of antibiotic drug Nuzyra] and the definition of progress of the program will be linked to specific development milestones." The company now expects to receive its second payment of $38 million from BARDA in the second half of next year.
The good news is that Paratek doesn't think the change in timing for the second procurement will impact its cash runway guidance. The company still expects its current cash stockpile will be sufficient to fund operations through the end of 2023.
Paratek also announced that the U.S. sites for its phase 2b clinical study evaluating Nuzyra in treating nontuberculous mycobacterial (NTM) pulmonary disease caused by Mycobacterium abscessus complex (MABc) are ready to begin enrolling patients. This study will likely take a couple of years to complete, though, due to the small number of patients with the rare disease.