Please ensure Javascript is enabled for purposes of website accessibility

Why Paratek Pharmaceuticals Stock Is Sinking Today

By Keith Speights - Jun 16, 2021 at 12:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company reduced its 2021 revenue outlook.

What happened

Shares of Paratek Pharmaceuticals (PRTK 1.16%) 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).

So what

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. 

$1 bill folded into the shape of an arrow pointing down.

Image source: Getty Images.

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.

Now what

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.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Paratek Pharmaceuticals, Inc. Stock Quote
Paratek Pharmaceuticals, Inc.
$2.61 (1.16%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.