Why Affymax Shares Popped
Nov 9th 2012 2:35PM
Updated Nov 9th 2012 2:42PM
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 biopharmaceutical company Affymax (NAS: AFFY) jumped as much as 11% today after the company reported better-than-expected third-quarter results.
So what: For the quarter, Affymax reported a 3% increase in revenue to $13.6 million, and quarterly loss of $0.68 per share compared to a loss of $0.28 per share last year. Both figures slid ever-so-slightly past Wall Street's expectations for a loss of $0.70 on revenue of $13.4 million. Consistent with its previous guidance, Affymax doesn't anticipate receiving any additional collaborative revenue in 2012, but it did note that $10.4 million of its $13.6 million in revenue came from payments by Takeda Pharmaceuticals concerning its partnership on Omontys, an injectable anemia treatment.
Now what: With drug approval only being half the battle, it appears that investors are just happy to see revenue streaming in from initial Omontys sales. However, I have to point out that with only one FDA-approved drug on pharmacy shelves and losses mounting, Affymax's run higher may be a bit overdone. It's a bit difficult to support a company that's quadrupled in price and is still two years away, at minimum, from being profitable. Needless to say, I'm perfectly happy remaining an innocent bystander here.
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