Will Immune Design (IMDZ) Miss on Earnings This Season? - Analyst Blog
Immune Design Corp. (IMDZ) is expected to report its fourth-quarter 2014 results after the market closes on Feb 11, 2015.
Last quarter, Immune Design missed estimates with a negative earnings surprise of 52.78%. Let’s see how things are shaping up for this announcement.
Factors Influencing Fourth-Quarter 2014
Since Immune Design is a clinical-stage biopharmaceutical company, currently focused on the development of immuno-oncology therapies, investors are expected to keep an eye on its pipeline progress.
The company, which is currently conducting two separate phase I studies on LV305 and G305, had said on its third-quarter call that following the completion of these studies, it intends to combine both agents to develop CMB305 as the primary candidate. Updates on the progress of these studies are expected along with its plans regarding the phase I study on CMB305, which is slated for initiation in 2015.
Immune Design earns its revenues from collaboration and license fees, and the sale of products associated with material transfer, collaboration and supply agreements. Its collaboration agreement with Sanofi (SNY) for using the GLAAS platform in the discovery, development and commercialization of therapies for a selected type of selected food allergy will allow the company to receive development and commercialization milestones of up to $168 million, apart from royalties on the sales of any product developed and approved under this partnership. The top line is expected to benefit from collaboration revenues in the fourth-quarter 2014. Immune Design is also expected to benefit from its Oct 2014 agreement with Sanofi for the development of a herpes simplex virus immune therapy.
Meanwhile, Immune Design’s total operating expenses are expected to increase as a result of higher investments in pipeline development, manufacturing costs and legal fees.
What Our Model Indicates
Our proven model does not conclusively show that Immune Design is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat earnings. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00% since the Most Accurate estimate is in line with the Zacks Consensus Estimate of a loss of 61 cents.
Zacks Rank: Immune Design’s Zacks Rank #4 (Sell) coupled with the Earnings ESP of 0.00% indicates that the company may not beat the earnings this quarter. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum. Estimates revisions for Immune Design are flat for the fourth quarter of 2014.
Stocks That Warrant a Look
Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Actavis plc (ACT) has an earnings ESP of +4.38% and carries a Zacks Rank #2. The company is scheduled to release its fourth-quarter 2014 results on Feb 18, 2015.
ARIAD Pharmaceuticals, Inc. (ARIA) has an Earnings ESP of +33.33% and carries a Zacks Rank #3. The company is scheduled to release fourth-quarter 2014 results on Feb 19, 2015.
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IMMUNE DESIGN (IMDZ): Free Stock Analysis Report
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