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.