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Although it's a clinical-stage company, the biotech handily beat the consensus analyst estimate for second-quarter revenue.
It whiffed mightily on earnings, but investors obviously didn't mind.
Gene-editing company Editas Medicine (NASDAQ: EDIT) was something of an unexpected star on the stock exchange as the trading week came to a close. The small biotech's share price was up by a robust 34% week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence, thanks to a well-received quarterly earnings report and business update.
Editas published the earnings release on Tuesday. The clinical-stage biotech earned slightly under $3.6 million in revenue during the period, which was entirely derived from collaboration and other research and development activities. That was, however, well up from the $513,000 in the same quarter last year.
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Image source: Getty Images.
On the bottom line, Editas did quite a decent job of narrowing its net loss. This came in at a bit over $53 million, or $0.63 per share, against the year-ago deficit of almost $67 million.
On average, analysts following Editas stock were anticipating a much lower revenue figure (under $2.2 million), yet a far narrower net loss ($0.40 per share).
A biotech's financial figures can swing around wildly, particularly if it's still in the clinical stage and has no predictable or meaningful revenue. What often affects the stocks of such companies far more is their operational update looking toward the future, and that produced the joy juice for Editas in the second quarter.
In the earnings release, Editas CEO Gilmore O'Neill said the company is now "driving toward our goal of nominating our first in vivo development candidate, which we plan to select in September."
Although he didn't get more specific, it's an exciting and tantalizing possibility that the company will advance to this highly important stage in the immediate future. This was surely the key news item driving the stock so high across the week.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Editas Medicine. The Motley Fool has a disclosure policy.
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