Infinity (INFI) Up 21.9% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Infinity Pharmaceuticals (INFI). Shares have added about 21.9% in that time frame, outperforming the S&P 500.

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

Infinity Posts Narrower-Than-Expected Loss in Q2

Infinity reported loss of 12 cents per share in second-quarter 2018, narrower than the Zacks Consensus Estimate of a loss of 20 cents. The company reported a loss of 34 cents in the year-ago quarter.

Since Infinity does not have any approved product in its portfolio yet, the company earns revenues in form of royalties, license and milestone payments as well as research and development (R&D) support fees paid by its partners.

Quarter in Detail

In the quarter, R&D expenses decreased 3.9% to $3.7 million due to reduction in bonus and stock compensation. The decrease was partially offset by an increase in clinical development expense for IPI-549.

General and administrative (G&A) expenses were $3.4 million in the quarter, down 45.4% from the year-ago quarter. The decrease was mainly due to a reduction in bonus and stock compensation.

2018 Outlook

Infinity reaffirmed its outlook for 2018. The company expects net loss for 2018 in the range of $35-$45 million. It also anticipates year-end cash, cash equivalents and available-for-sale securities balance in the $15-$25 million range. Moreover, Infinity expects existing cash, cash equivalents and available-for-sale securities to be adequate to fund the company's capital needs through third-quarter 2019.

Other Updates

Infinity is evaluating IPI-549 as a monotherapy as well as in combination with Bristol-Myers’ Opdivo in a MARIO-1 phase I/Ib study in approximately 200 patients with advanced solid tumors. Enrollment is complete in the mesothelioma combination expansion cohort and is ongoing for the other five disease-specific combination expansion cohorts as well as the seventh combination expansion cohort of patients pre-selected for having high baseline blood levels of myeloid derived suppressor cells (MDSCs), which began enrolling patients in May 2018.

Infinity also partnered with Arcus Biosciences Inc., which will initiate two triple combinations investigating IPI-549 with their dual adenosine receptor antagonist, AB928; anti-PD-1 antibody, AB122; and chemotherapy in triple negative breast cancer and ovarian cancer.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 23.33% due to these changes.

VGM Scores

Currently, Infinity has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Infinity has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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