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| Aratana Therapeutics CEO Steven St. Peter |
Aratana Therapeutics ($PETX) reported Thursday that sales of its first commercial product, AT-005 to treat canine T-cell lymphoma, totaled $156,000 in the first quarter, and that the company's net loss narrowed to $8.8 million from $9.1 million in the same period last year. The net per-share loss of 26 cents topped analysts' expectations that Aratana would report a loss of 42 cents per share. The company's stock price rose nearly 10% in morning trading on Friday to $14.61.
The Kansas City company has two approved products to treat canine lymphoma, but it is still pouring significant resources into expanding its pipeline. "We continue to focus on developing products which we believe will benefit pets with serious medical diseases," said Steven St. Peter, CEO of Aratana Therapeutics, in a press release announcing the earnings results.
Aratana has been focusing its commercial efforts on its lymphoma franchise, which includes AT-005, available on a limited basis under a conditional USDA license, and AT-004 to treat canine B-cell lymphoma. The USDA granted full approval to AT-004 in January.
Although Aratana is now free to market AT-004 widely across the U.S., the product's launch has been hampered by red tape. AT-004 was originally developed under a licensing deal with Novartis ($NVS) Animal Health, which was bought by Eli Lilly's ($LLY) Elanco last year. Aratana finally broke free of that deal and regained rights to the product in February, agreeing to pay a modest upfront fee to Elanco of $2.5 million and an additional $500,000 upon the first commercial sale of the drug.
But Aratana also had to take on the manufacturing burden, and the company said during its earnings release today that it's still working on establishing enough capacity for both AT-004 and AT-005. The company doesn't expect to fully launch its lymphoma franchise until 2016.
Meanwhile, Aratana continues to advance four products in its pipeline through pivotal trials, including a drug to treat post-operative pain, and an immunotherapy treatment for osteosarcoma in dogs. The company also has several treatments in its early-stage pipeline, including three for feline disorders. St. Peter told analysts in a postearnings conference call that he is "very excited about the cat market."
And on May 4, Aratana formed a $250,000 cooperative R&D deal with Stony Brook, NY-based Traverse Biosciences to develop TRB-N0224, a treatment for periodontal disease in dogs and cats. St. Peter said during the earnings call with analysts that he was particularly enthusiastic about this deal because of the size of the potential market. "Periodontal disease affects 80% of dogs," he said.
Still, St. Peter said he understands that Wall Street is expecting 2015 to be a transformative year for Aratana and that the company has a long way to go before it can make good on its prediction of a full commercial launch next year. He closed the earnings call with a bold promise: "We are very proud to say we will be ready."
- here's the earnings release