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Understanding Tesaro’s Operational Performance

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Dec. 4 2020, Updated 10:53 a.m. ET

Operating expenses

Tesaro’s (TSRO) selling, general, and administrative expenses increased from $92.98 million in the second quarter of 2017 to $100.03 million in the second quarter of 2018. The increase was due to higher expenses for salaries, benefits, and other personnel-related costs.

Tesaro’s R&D (research and development) expenses increased from $71.4 million in the second quarter of 2017 to $97.61 million in the second quarter of 2018. The increase was due to higher personnel costs from a higher headcount and higher costs associated with Tesaro’s immune-oncology platform related to clinical costs for TSR-042 and TSR-022. In the second quarter of 2017, it incurred $7 million in acquired in-process R&D costs comprised of two milestone payments made to AnaptysBio related to TSR-033 and TSR-042.

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Tesaro’s total operating expenses increased from $177.98 million in the second quarter of 2017 to $212.65 million in the second quarter of 2018. As a result of higher expenses, its operating loss increased from $148.51 million in the second quarter of 2017 to $155.44 million in the second quarter of 2018.

Bottom line

Tesaro’s interest expense increased from $4.43 million in the second quarter of 2017 to $12.83 million in the second quarter of 2018. Its interest income also increased from $959,000 in the second quarter of 2017 to $1.53 million in the second quarter of 2018. While Tesaro had made a provision of $78,000 for income taxes in the second quarter of 2017, it received a benefit from income taxes of $8,000 in the second quarter of 2018.

Tesaro’s net loss widened from $152.06 million in the second quarter of 2017 to $166.65 million in the second quarter of 2018. That translated to a net loss per share of $3.04 in Q2 2018 compared to $2.82 in Q2 2017.

Let’s look at Tesaro’s valuation metrics in the next part.

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