Company Update (NASDAQ:OCRX): Ocera Therapeutics Inc Announces 4Q and Full Year 2016 Financial Results


Ocera Therapeutics Inc (NASDAQ:OCRX) announced updates to its clinical development programs and reported financial results for the quarter and year ended December 31, 2016.

“2016 was a busy year for Ocera, culminating with the timely completion of enrollment in the fourth quarter of STOP-HE, a landmark study evaluating intravenous OCR-002 (ornithine phenylacetate) in patients hospitalized with acute hepatic encephalopathy (HE),” said Linda Grais, M.D., Chief Executive Officer of Ocera. “We also advanced our oral program testing orally-administered OCR-002 in patients with cirrhosis and developing a tablet formulation which is poised for clinical evaluation in 2017.

“In January 2017, we reported positive results from our Phase 1 study of orally-administered OCR-002 in patients with chronic liver cirrhosis. The study demonstrated robust bioavailability and promising pharmacokinetic and safety profiles in the intended use population. In addition, we recently announced the data from STOP-HE, including encouraging results demonstrating that OCR-002 is a potent ammonia scavenger, that the level of HE severity directly correlates with the level of ammonia, and that ammonia reduction correlates with clinical improvement in HE symptoms. Recent analyses support our belief that OCR-002 can become an important intervention in both the treatment and prevention of HE,” added Dr. Grais.

Anticipated 2017 Activity

  • Initiate Phase 2a multi-dose study of oral OCR-002 in cirrhotic patients in H1 2017
  • Meet with the Food and Drug Administration in Q3 2017 regarding STOP-HE with goal of clarifying Phase 3 development plan

Fourth Quarter and Full Year 2016 Financial Results

  • As of December 31, 2016, Ocera had cash, cash equivalents and investments of $28.4 million, compared with $43.3 million at December 31, 2015.
  • Net use of cash for 2016 was $22.1 million, which was consistent with Ocera’s most recent guidance of the low end of the range of $22.0 to $26.0 million. Net use of cash equals the difference of cash, cash equivalents and investments at December 31, 2016 and 2015, less cash provided by financing activities, consisting of net proceeds of $7.1 million generated by an “At-the-Market” equity program during 2016.
  • Net loss for the three and twelve months ended December 31, 2016 was $5.2 million and $26.9 million, respectively. Net loss for the three and twelve months ended December 31, 2015 was $7.1 million and $26.5 million, respectively. Basic and diluted net loss per share for the three and twelve months ended December 31, 2016 was $0.22 and $1.22, respectively. Basic and diluted net loss per share for the three and twelve months ended December 31, 2015 was $0.34 and $1.32, respectively.
  • Revenue for the three and twelve months ended December 31, 2016 was $512,000 and $609,000, respectively. Revenue for the three and twelve months ended December 31, 2015 was $24,000 and $133,000, respectively. Revenue in all periods consisted of royalty and licensing revenue generated from certain clinical-stage assets acquired in connection with the 2013 reverse merger between Ocera and Tranzyme, Inc.
  • Research and development (R&D) expense for the three and twelve months ended December 31, 2016 was $3.2 million and $16.1 million, respectively. R&D expense for the three and twelve months ended December 31, 2015 was $3.9 million and $16.0 million, respectively. The decrease in R&D expense for the three-month period was due primarily to a decrease in external development expenses, partially offset by personnel and related expenses.
  • General and administrative (G&A) expense for the three and twelve months ended December 31, 2016 was $2.2 million and $10.4 million, respectively. G&A expense for the three and twelve months ended December 31, 2015 was $2.9 million and $10.3 million, respectively. The decrease in G&A expense for the three-month period was due primarily to lower personnel and related expenses.

Financial Guidance

Ocera anticipates it will have sufficient cash to fund operations into the second quarter of 2018 based on its current operating plan and re-prioritization of certain development activities.

Shares of Ocera Therapeutics are down nearly 4% to $1.81 in after-hours trading. OCRX has a 1-year high of $3.75 and a 1-year low of $0.52. The stock’s 50-day moving average is $0.96 and its 200-day moving average is $1.99.

On the ratings front, OCRX has been the subject of a number of recent research reports. In a report released yesterday, Aegis analyst Difei Yang reiterated a Buy rating on OCRX, with a price target of $3.00, which represents a potential upside of 59% from where the stock is currently trading. Separately, on January 31, JMP’s Liisa Bayko downgraded the stock to Hold.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Difei Yang and Liisa Bayko have a yearly average return of 8.5% and 13.5% respectively. Yang has a success rate of 44% and is ranked #516 out of 4515 analysts, while Bayko has a success rate of 53% and is ranked #389.

Ocera Therapeutics, Inc. is a clinical stage biopharmaceutical company. It engages in development and commercialization of OCR-002 (ornithine phenylacetate0 in intravenous and oral formulations.

 

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