Adverum Biotechnologies, Inc. :ADVM-US: Earnings Analysis: Q3, 2016 By the Numbers : November 28, 2016

Adverum Biotechnologies, Inc. reports financial results for the quarter ended September 30, 2016.

We analyze the earnings along side the following peers of Adverum Biotechnologies, Inc. – OncoGenex Pharmaceuticals, Inc., Agilent Technologies, Inc., Acceleron Pharma Inc and Auris Medical Holding AG (OGXI-US, A-US, XLRN-US and EARS-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 0.40 million, Net Earnings of USD -14.30 million.
  • Year-on-year change in operating cash flow of -4.63% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-09-30 2016-06-30 2016-03-31 2015-12-31 2015-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 0.4 0.31 0.27 0.96 0.95
Revenue Growth (%YOY) -58.55 51.23 30.54 372.91 367.16
Earnings (mil) -14.3 -61.66 -15.39 -14.09 -14.08
Earnings Growth (%YOY) -1.54 -531.37 -61.87 -35.64 -70.59
Net Margin (%) -3620.51 -20084.69 -5808.3 -1468.13 -1477.86
EPS -0.35 -1.76 -0.57 -0.55 -0.55
Return on Equity (%) -23.64 -100.83 -24.92 -21.9 -21.14
Return on Assets (%) -21.96 -95.36 -23.81 -20.95 -20.21

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Market Share Versus Profits

Revenues History
Earnings History

ADVM-US‘s change in revenue this period compared to the same period last year of -58.55% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that ADVM-US is holding onto its market share. Also, for comparison purposes, revenues changed by 28.66% and earnings by 76.81% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Cash Versus Earnings – Sustainable Performance?

ADVM-US‘s change in operating cash flow of -4.63% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

Margins

The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from -1,490.14% to -3,620.25% and (2) one-time items that contributed to a decrease in pretax margins from -1,477.86% to -3,667.85%

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Adverum Biotechnologies, Inc. is a clinical-stage biotechnology company that develops and discovers novel gene therapies to treat patients with sight-threatening ophthalmic diseases. The company was founded by Mark S. Blumenkranz, Thomas W. Chalberg, Jr. and Steven Daniel Schwartz on July 17, 2006 and is headquartered in Menlo Park, CA.

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