Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Tetraphase Pharmaceuticals (NASDAQ:TTPH), a clinical-stage biopharmaceutical company focused on developing therapies to treat multi-drug-resistant infections, spiked higher by as much as 13% after reporting its third-quarter earnings results.
So what: For the quarter, Tetraphase reported a 14.6% decline in revenue to $2.2 million from the year-ago period as its net loss more than tripled to $10.1 million from just $3.1 million in the prior year. Due to the company recently going public, however, Tetraphase's net loss dipped to $0.49 per share from $9.63 per share in the previous year. By comparison, Wall Street had been expecting a narrower loss of just $0.42 per share. The real excitement here is that the company announced its quarterly highlights which included the first phase 3 dosing of lead drug candidate eravacycline for the treatment of intra-abdominal infections, and confirmed a second phase 3 trial involving eravacycline in an IV-to-oral step-down as a treatment of complicated urinary tract infection.
Now what: This has been a theme this year in the biotech sector -- pumping up recently IPO'd biotechs after they announce the first dosing of a mid- or late-stage trial. While I'm not saying that shareholders shouldn't be excited about eravacycline's potential, I am suggesting that it might be best to wait for the top-line data before betting significantly on Tetraphase's future. You could potentially miss out on a big pop this way, but you'll set yourself up for potentially safer long-term returns.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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