Infinity Pharma Down on Wider-than-Expected Loss - Analyst Blog

Infinity Pharmaceuticals Inc.'s INFI shares have been declining ever since it announced its first quarter results on May 6. The company's shares have declined 6.9% so far. Infinity Pharma reported a loss of 87 cents per share in the first quarter of 2014, wider than the Zacks Consensus Estimate of a loss of 80 cents and the year-ago loss of 57 cents per share. The wider loss was attributable to higher operating expenses.

Infinity Pharma did not generate any revenue during the first quarter of 2014, similar to the year-ago quarter.

Other Details

Infinity Pharma's research and development (R&D) expenses were up 70.4% to $34.5 million in the reported quarter. The increase was primarily due to higher clinical expenses related to the pipeline. The company's general and administrative (G&A) expenses declined 8.4% to $6.8 million.

Infinity Pharma has progressed well with its pipeline. The company also has a series of pipeline related events lined up in the coming quarters. The company expects to initiate a phase III study (DYNAMO+R) on IPI-145 in combination with Roche Holding/Biogen Idec Inc.'s (RHHBY/BIIB) Rituxan (rituximab) in patients suffering from relapsed indolent non-Hodgkin lymphoma (iNHL) later in the year.

Infinity Pharma also has plans to start a phase II study on IPI-145 for the treatment of treatment-naïve patients suffering from iNHL. Infinity Pharma is currently evaluating IPI-145 in patients suffering from iNHL in the phase II DYNAMO study. The primary objective of the study is to evaluate the response rate as per the International Working Group criteria.

The company is also running a phase III study on IPI-145 in patients suffering from chronic lymphocytic leukemia. IPI-145 is also being developed for the treatment of mild allergic asthma (phase IIa) with top-line data expected later in the year. Results from another phase II study on the candidate in patients suffering from moderate-to-severe rheumatoid arthritis are expected later this year.

2014 Guidance

Infinity Pharma maintained its 2014 operating expenses guidance within $170−$180 million and net loss guidance in the range of $170−$180 million.

Our Take

We are encouraged by the company's progress with IPI-145. We expect investor focus to remain on the candidate going forward.

Infinity Pharma, a biopharmaceutical company, currently carries a Zacks Rank #3 (Hold). A better-ranked stock worth considering is Spectrum Pharmaceuticals, Inc. SPPI carrying a Zacks Rank #1 (Strong Buy).