Will Aerie (AERI) Post a Wider-Than-Expected Loss in Q3?
Aerie Pharmaceuticals, Inc. AERI is scheduled to report third quarter results after the market closes on Nov 3, 2015. Aerie’s performance over the last four quarters has been disappointing with the company missing expectations in all the quarters with an average surprise of -21.15%.
Let’s see how things are shaping up for the third quarter announcement.
Pipeline in Focus
Being a development-stage company, Aerie does not have any approved product in its portfolio yet. With the company not generating any revenues, investor focus will remain on pipeline updates.
Aerie is working on the discovery, development and commercialization of topical, small molecule products to treat patients with glaucoma and other diseases of the eye.
The company is looking to file for FDA approval of Rhopressa, one of its most advanced pipeline candidates, in mid-2016. Rhopressa, a once-daily, triple-action eye drop, is being evaluated for lowering intraocular pressure (IOP) in patients with glaucoma or ocular hypertension. In Sep 2015, the company reported positive efficacy data from a phase III study (ROCKET 2). Safety results from this study should be out later this year or early next year.
Rhopressa is in a fourth phase III study (ROCKET 4) with 3-month efficacy data from this study expected in Summer 2016. The company can use data from this study in case the FDA requires further information during the regulatory process.
Meanwhile, another later-stage candidate in the company’s pipeline is Roclatan (a fixed dose combination of Rhopressa and Xalatan [latanoprost -- the market leading prostaglandin analogue]), which is in a phase III study for lowering IOP in patients with glaucoma or ocular hypertension with three-month efficacy data expected in Summer 2016. Two more phase III studies on Roclatan will commence next year.
An update on the company’s early-stage pipeline should also be provided on the third quarter call.
Earnings Whispers?
Our proven model does not conclusively show that Aerie is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: Earnings ESP for Aerie is 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both a loss of 81 cents per share.
Zacks Rank: Aerie carries a Zacks Rank #3 (Hold). We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Here are a few health care companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Myriad Genetics, Inc. MYGN has an Earnings ESP of +2.86% and carries a Zacks Rank #2 (Buy). The company is scheduled to report results on Nov 3.
Sarepta Therapeutics, Inc. SRPT has an Earnings ESP of +10.08% and carries a Zacks Rank #3 (Hold). The company is expected to report results on Nov 5.
Merrimack Pharmaceuticals, Inc. MACK has an Earnings ESP of +2.44% and carries a Zacks Rank #3 (Hold). The company is expected to report results on Nov 9.
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