Zevra Therapeutics (ZVRA) stock gapped down Wednesday, undercutting its 50-day line, after its first-ever quarterly profit missed even more bullish expectations.
The biotech company earned $1.21 per share, flipping from a year-earlier loss of 48 cents. But that lagged the Street's call for a gain of $2.26 a share. Promisingly, the strong launch of rare disease drug Miplyffa helped drive stronger sales. Sales grew almost sixfold to $25.9 million, beating views for $22.6 million, according to FactSet.
But, after the stock market opened, Zevra shares crashed more than 24% to 8.92. Shares toppled below their 50-day moving average for the first time since May.
William Blair analyst Sami Corwin remained upbeat on Zevra Therapeutics shares, however.
The biotech company is launching Miplyffa, a treatment for the neurological symptoms associated with Niemann-Pick disease type C. NPC is a rare, genetic neurodegeneration disorder that causes progressive neurological and development decline. It primarily affects children.
During the June quarter, Miplyffa brought in $21.5 million in sales. That topped Corwin's call for $19.4 million and broader views for $18.2 million.
Zevra Therapeutics noted it has received seven new prescription enrollment forms, bringing the total to 129 since the drug launched late last year. There are also 89 patients in Europe under an expanded access program.
The company is trying to expand diagnosis rates through a "Read Between the Signs" campaign and machine learning to parse through symptom profiles to find undiagnosed NPC patients. This could help close the gap on the estimated 900 NPC patients in the U.S. and the 300 to 350 currently diagnosed patients.
But Zevra Therapeutics' Olpruva is struggling. Olpruva, which treats a group of disorders where the body can't remove ammonia, generated just $300,000 in sales. That missed calls $500,000.
"Despite achieving 79% coverage, adoption has been slower due to the mature (urea cycle disorders) market and strong patient satisfaction with existing treatments, with only one new prescription enrollment form in the quarter," William Blair's Corwin said.
The company also took a noncash impairment charge and an inventory write-down during the quarter, "reflecting cautious expectations."
"However, the company is also cautiously optimistic that a near-term shift in competitive dynamics may provide an opportunity for patients to switch to Olpruva if they are at risk of losing their patient support services with their current medications," she said.
Other drugs in this space include Amgen's (AMGN) Buphenyl and Ravicti.
Corwin kept her outperform rating on Zevra stock. All eight analysts who cover Zevra Therapeutics, according to FactSet, rate its shares a buy or buy-equivalent.
Shares have a strong IBD Digital Relative Strength Rating of 94. This means Zevra stock ranks in the top 6% of all stocks when it comes to 12-month performance. The Composite Rating, a measure of fundamental and technical metrics, is a lower 84.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
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