2seventy Bio (TSVT -1.69%), known for its advancements in CAR T-cell therapies, announced its third-quarter results on Nov. 12. The earnings report showed the biotech making substantial progress in reducing operating costs -- down 24% -- but its revenues of $13.5 million fell short of analysts' consensus estimate of $16.2 million.
Its net loss narrowed to $9.9 million or $0.19 per share, in line with the analysts' estimate for a loss of $0.19 per share.
| Metric | Q3 2024 Result | Q3 2024 Analysts' Estimate | Q3 2023 Result | % Change YOY |
|---|---|---|---|---|
| Total revenue | $13.5 million | $16.2 million | $12.0 million | 12.5% |
| Net income | ($9.9 million) | - | ($71.6 million) | N/A |
Source: Analyst estimates for the quarter provided by FactSet.
Understanding 2seventy Bio
2seventy Bio focuses on pioneering cell and gene therapies. Its lead product, Abecma, is a chimeric antigen receptor (CAR) T-cell therapy designed for multiple myeloma patients. This therapy was jointly developed and commercialized with Bristol Myers Squibb, which aids its market reach and production abilities. Abecma has shown strong potential.
2seventy Bio has centered its efforts on Abecma, aiming to expand its market footprint and effectively differentiate it in the oncology landscape. Its strategy has included ongoing clinical trials, refinement of the manufacturing process, and strategic marketing approaches. Its success is tied to optimizing these factors, ensuring Abecma's competitiveness, and continuously working on cost management initiatives, such as recent asset sales.
Quarterly Highlights
During the third quarter, 2seventy Bio's financial journey was marked by strategic shifts and tactical plays. Its progress on the cost-control front could be seen in its 24% reduction in operating expenditures. This streamlining was crucial in cutting its net losses from $71.6 million in the same quarter last year to $9.9 million in the most recent quarter.
On the revenue front, Abecma generated $77 million in U.S. commercial sales, marking 42% growth quarter over quarter. This surge was attributed to its wider adoption as an earlier treatment line. However, overall revenues fell short of expectations at $13.5 million. The discontinuation of enrollment in its ongoing phase 3 KarMMa-9 study of Abecma in multiple myeloma patients is expected to save the company more than $80 million.
Collaboration with Bristol Myers Squibb remains central, not just on the revenue front but in sharing associated profits and losses. Collaborative arrangement revenue contributed $11 million to the top line in the quarter, showcasing an ongoing productive partnership.
Looking Ahead
Operational realignment remains a pivotal narrative, with the sale of oncology assets to Regeneron providing resources for Abecma's commercialization. That sale is expected to close in the first half of 2024 and is expected to streamline the management of 2seventy Bio's R&D pipeline.
The biotech's cash and equivalents as of the quarter's end stood at $192 million -- down from $222 three months earlier. That gives it a healthy liquidity status that management sees extending beyond 2027, reinforcing confidence in its ability to advance its strategic pursuits and pivot toward profitable operations by 2025.
Management forecasts that the company's operations will break even by 2025. To achieve this, it is intensifying its focus on strengthening Abecma's market presence and enhancing its reimbursement level. It projects full-year sales of between $240 million and 250 million for Abecma. Investors should watch Abecma's continued market uptake closely.
