Cempra Earnings: Here’s Why Investors are Buying Shares Now

Cempra Inc (NASDAQ:CEMP) had a loss and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 8%.

Cempra Inc Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $-0.16 in the quarter versus EPS of $-0.45 in the year-earlier quarter.

Revenue: Was the same at $4.6 million as the year-earlier quarter.

Actual vs. Wall St. Expectations: Cempra reported adjusted EPS loss of $0.16 per share. By that measure, the company beat the mean analyst estimate of $-0.29. It beat the average revenue estimate of $3.42 million.

Quoting Management: “Cempra achieved several significant milestones during the second quarter of 2013 that, in particular, clarify the path toward approval for solithromycin,” said Prabhavathi Fernandes, Ph.D., chief executive officer of Cempra. “Our end-of-Phase 2 meeting with the FDA for solithromycin provided a very satisfactory outcome so that we now understand the expected regulatory path to an NDA submission for CABP. We are planning to initiate the IV-to-oral Phase 3 trial of solithromycin in CABP in the fourth quarter of 2013 based on that meeting. We have raised the necessary capital estimated to fund our solithromycin Phase 3 program in community-acquired bacterial infections, or CABP, through a follow-on equity offering. The Biomedical Advanced Research and Development Authority, or BARDA, is expected to fund the development of solithromycin to treat infections in pediatric populations and infections by bioterror threat pathogens. We are especially proud of our exclusive license and development agreement for solithromycin in the Japanese market with Toyama Chemical Co. Finally, we extended the potential exclusivity period for Taksta to 2029 and we continue to look forward to disclosing interim top-line results of the Taksta Phase 2 prosthetic joint infection, or PJI, study by the end of the year. We look forward to an exciting second half of 2013 as we move closer to bringing our differentiated antibiotics to market.”

Key Stats (on next page)…

EPS increased to $-0.16 in the quarter versus EPS of $-0.42 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a loss of $0.40 to a loss $0.39. For the current year, the average estimate has moved up from a loss of $1.63 to a loss of $1.52 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)