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Aerie (AERI) Up 11.8% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Aerie Pharmaceuticals (AERI). Shares have added about 11.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Aerie due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Aerie Q4 Earnings Miss, Revenues Top Mark

Aerie incurred a loss of 79 cents per share in the fourth quarter, wider than the Zacks Consensus Estimate of a loss of 75 cents but narrower than the year-ago loss of 96 cents.

Revenues came in at $24.7 million, which remained almost flat year over year and beat the Zacks Consensus Estimate of $19 million. Total revenues came from sales of two approved drugs — Rhopressa and Rocklatan.

The company’s first drug, Rhopressa (netarsudil ophthalmic solution), has been approved for the reduction of elevated intraocular pressure (“IOP”) in patients with open-angle glaucoma or ocular hypertension. Aerie’s second drug, Rocklatan, a once-daily, quadruple-action, fixed-dose combination of Rhopressa and Pfizer’s Xalatan, has been approved to reduce elevated IOP in patients with open-angle glaucoma or ocular hypertension.

Quarter in Detail

Wholesaler shipments totaled 307,000 bottles in the fourth quarter of 2020, more than 18% higher than 261,000 bottles in the third quarter of 2020.

Total operating expenses (excluding stock-based compensation expenses) in the fourth quarter were $44.8 million, down from the year-ago quarter’s $61.7 million.

Full-Year Results

For 2020, Aerie generated revenues of $83.1 million, reflecting a 19% increase year over year.

For the same period, the company reported adjusted loss of $3.12 per share compared with the year-ago adjusted loss of $3.40 per share.

Recent Updates

In January 2021, the European Commission granted marketing authorization to Roclanda (netarsudil and latanoprost ophthalmic solution) 0.02%/0.005% for the reduction of elevated intraocular pressure in adult patients with primary open-angle glaucoma or ocular hypertension for whom monotherapy with a prostaglandin or netarsudil provides insufficient IOP reduction. The drug is marketed under the trade name Rocklatan in the United States. The nod from EU should boost the drug’s sales in future quarters.

We note that Aerie and Santen has an exclusive license agreement for the development and commercialization of Rhopressa and Rocklatan in Japan and several other Asian countries. The agreement includes an upfront payment of $50 million to Aerie. The first phase III study on Rhopressa is currently underway in Japan.

Also, in October 2020, Aerie commenced the COMET-1, a phase IIb study of AR-15512 for the treatment of patients with dry eye disease. Top-line data from the same is expected in the third quarter of 2021.


 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Aerie has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Aerie has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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