Portola Phramaceuticals (PTLA)

[DewDiligence]

PTLA -40% on soft 4Q19 Andexxa sales—consistent with yesterday’s AH session (#msg-153217853).

Why such a steep selloff? 4Q19 Andexxa sales of $28M were down 15% from 3Q19, and investors evidently aren’t buying these excuses in the PR:

Fourth quarter Andexxa net sales in the U.S. were impacted primarily by two factors:

• A $5 million gross to net adjustment due to a return reserve for short-dated product. The Company expects this to be mitigated going forward by its current longer-dated, 36-month product, which began shipping in November 2019.

• Flat quarter over quarter demand due to a decrease in utilization, primarily in tier 1 accounts. While physician demand remains strong, the Company believes that in certain of these accounts, hospital pharmacies curtailed use of Andexxa following drug utilization reviews in an effort to manage pharmacy budgets. Following this reduction, re-ordering patterns are stabilizing in many of these accounts.

Even without the adjustment in the first bullet item, 4Q19 sales would’ve been only flat vs 3Q19—and well short of prior guidance.