What happened
A big revenue beat couldn't make up for a modest bottom-line miss on Tuesday for CTI BioPharma (CTIC). Shares of the commercial-stage biotech took a nearly 12% hit on the day, as investors signaled their disapproval of the company's latest set of quarterly results.
So what
CTI recorded $12.3 million in net product sales for its second quarter, up from zero in the year-ago quarter. That dramatic change was entirely due to the product launch of Vonjo. This is CTI's drug that was approved by the Food and Drug Administration (FDA) in March for the treatment of myelofibrosis, a rare bone marrow disorder.
However, when biotech companies launch a product, their expenses connected with marketing and selling it usually ramp up considerably. That was the case with CTI's second quarter, with notably higher costs -- particularly in the selling, general, and administrative sphere -- deepening the company's net loss to almost $22.7 million ($0.21 per share) from the year-ago quarter's nearly $19.7 million shortfall.
Analysts weren't expecting such quick take-up of Vonjo. On average, their estimate for the quarter's revenue was only $9.1 million. Yet their assumption for net loss was only $0.19 per share.
Now what
CTI didn't proffer any guidance, but it did quote its CEO Adam Craig as saying that, "We look forward to extending the reach of Vonjo over the coming months and years." So far, the drug only has approval in the U.S., so the potential for expansion abroad is obvious.
Still, investors weren't in a particularly forgiving mood during Tuesday's bear market. They may have been overly fixated on that minor bottom-line miss. Their assertive sell-off feels a bit unjustified, given the early success of Vonjo.
