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Why Navidea Biopharmaceuticals, Inc. Shares Jumped

By Sean Williams – Mar 6, 2014 at 3:18PM

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Navidea shares ascend after reporting its fourth-quarter earnings results. Here's the one thing investors should really be watching.

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 Navidea Biopharmaceuticals (NAVB 12.18%), a developer of precision diagnostics and radiopharmaceutical agents, jumped as much as 12% after reporting its fourth-quarter earnings results before the opening bell.

So what: For the quarter, Navidea reported revenue of $535,000, consisting of $343,000 from its FDA-approved lymphatic mapping agent Lymphoseek, up from $144,000 in sales in the sequential third quarter. Net loss, however, jumped considerably to $13.1 million from $7 million in the year-ago period. This translated into a net loss of $0.10 per share, $0.01 per share worse than analysts had predicted. Looking ahead, Navidea anticipates $5 million-$6 million in Lymphoseek revenue in fiscal 2014 compared to $614,000 in fiscal 2013.

Navidea also announced that it had closed on a $30 million five-year senior secured term loan with Oxford Finance, which will help with the commercialization and education of Lymphoseek.

Now what: You might be scratching your head and thinking to yourself, "Didn't Navidea miss its EPS loss estimate? Why are shares up?" The reason is a combination of rapid sequential growth in Lymphoseek from the third quarter, as well as the recently closed non-dilutive financing, which will allow it to aggressively market Lymphoseek. What investors should have their eyes on here is the mid-June PDUFA date to expand Lymphoseek's indications beyond breast and cancer and melanoma and into head and neck cancers as well. With a big push expected in utilizing diagnostics to personalize treatment options for cancer patients over the next decade, I could certainly see Navidea becoming a success. Although today's earnings report wasn't much to look at, I'd suggest adding it to your watchlist for further review.

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.

The Motley Fool has no position in any companies mentioned in this article. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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