Several days ago, Aptevo Therapeutics (NASDAQ:APVO) provided a corporate and pipeline update that surprised me (and I don't get surprised easily).
To begin with, the company's hemophilia B drug IXINITY will do about $9M in revenue for Q3'19. This is a very important milestone for the company, and personally, I think it will change the stock's trajectory going forward.
For starters, $9M represents a 22% sequential increase. One reason for this increase according to the company, was the introduction of the recent larger 3,000 IU assay and the great job the sales team is doing to promote awareness of IXINITY.
Something else that was interesting in the conference call that followed, was that the company said until recently Hemophilia B patients did not have many choices until IXINITY came along.
I am not an expert on Hemophilia B drugs, but I am assuming IXINITY has something that other drugs don't, which explains the reason for IXINITY adoption. Whatever the reason, what investors need to understand, pertaining to this development, is that the company might become profitable in the next 12 months (more on this below).
Expense Reduction Plan
The company also announced it is "implementing an expense reduction plan" that reduces annual expenditures by approximately 30%.
From the press release:
Planned reductions include: streamlining R&D programs, including reducing investment in certain programs; cut-backs in legal, professional and consulting expenses; reduction of leased space; cut-backs in non-commercial headcount; and reductions in executive and board cash compensation.
As such, estimated cash burn for 2020 will be in the range between $24-$28M, compared to the current estimated cash burn rate of $36-$40 million for 2019.
Please note that if we assume IXINITY revenue comes in at about $40M over the next 12 months, it might make the company profitable. This even if we assume the cash
