Will Kite Pharma (KITE) Miss Earnings Estimates Yet Again? - Analyst Blog
Kite Pharma, Inc. KITE is scheduled to report second-quarter 2015 results on Aug 10. The company, which started trading from Jun 2014, has posted negative earnings surprises in the last four trailing quarters. Overall, the company posted an average negative earnings surprise of 289.58% over the past four quarters.
In the last reported quarter, Kite Pharma posted a negative earnings surprise of 131.03%. Let's see how things are shaping up for this announcement.
Factors at Play
Kite Pharma, a development-stage biopharmaceutical company, is looking to transform the paradigm of treating cancer which involves using the body’s immune system to recognize and destroy cancer cells. The company uses its engineered autologous cell therapy (eACT) to genetically modify T cells to express either chimeric antigen receptors (CARs) or T cell receptors (TCRs). These modified T-cells are designed to recognize and destroy cancer cells.
Kite Pharma’s revenues comprise the amortization of deferred collaboration revenues related to the $60 million upfront payment received under its collaboration agreement with Amgen AMGN in the first quarter of 2015.
With no approved products in its portfolio, investor focus will be primarily on the company’s cash burn and pipeline updates. The company’s lead pipeline candidate, KTE-C19, is currently in a multicenter phase I/II study in patients with refractory diffuse large B cell lymphoma (DLBCL) including primary mediastinal B cell lymphoma (PMBCL) and transformed follicular lymphoma (TFL). If the phase I/II study generates positive data (expected in 2016), Kite Pharma intends to seek accelerated FDA approval for the treatment for patients with refractory DLBCL, PMBCL and TFL. If all goes well, KTE-C19 could be launched as early as 2017.
Meanwhile, Kite Pharma signed up with bluebird bio, Inc. BLUE for the development and commercialization of second generation TCR candidates directed against the human papillomavirus type 16 E6 (HPV-16 E6) oncoprotein.
Earnings Whispers?
Our proven model does not conclusively show that Kite Pharma 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: Earnings ESP for Kite Pharma is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 41 cents per share.
Zacks Rank: Kite Pharma carries a Zacks Rank #3. Kite Pharma’s Zacks Rank #3 when combined with an ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here is a company you may want to consider as our model shows that it has the right combination of elements to post an earnings beat.
Immune Design Corp. IMDZ has an Earnings ESP of +20.41% and carries a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug 12.
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AMGEN INC (AMGN): Free Stock Analysis Report
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