What's in Store for Endocyte (ECYT) this Earnings Season? - Analyst Blog
Endocyte, Inc. (ECYT) is expected to report fourth-quarter 2014 results on Feb 23. Last quarter, the company posted an earnings surprise of +26.32%. The company has a pretty good track record having delivered positive earnings surprises in each of the last four quarters with an average beat of 119.38%. Let’s see how things are shaping up for this announcement.
Pipeline to Remain in Focus
On its third quarter conference call Endocyte had mentioned that it does not expect to receive any further revenues in the coming quarters as the company’s collaboration agreement with Merck & Co. Inc. (MRK) ended in Sep 2014. In May 2014, Endocyte and Merck had stopped patient enrollment in a phase III study (PROCEED) on vintafolide for the treatment of platinum resistant ovarian cancer (PROC) and withdrew their conditional marketing authorization applications in the EU for vintafolide as recommended by the Data and Safety Monitoring Board. During the third quarter, Endocyte received $3.9 million as final revenues from its collaboration agreement with Merck for both PROCEED and TARGET studies on vintafolide.
Being a clinical stage biotech company, Endocyte does not generate product revenues. Although Endocyte focuses on pipeline development, it expects overall expenditure to come down during the fourth quarter due to reduced costs related to the phase IIb TARGET study on Endocyte’s lead candidate, vintafolide, in non-small cell lung cancer (NSCLC). Final overall survival data from the study is awaited. The company expects to evaluate the candidate in the NSCLC indication.
Moreover, Endocyte is evaluating two other candidates – EC1169 and EC1456. Studies on both candidates are ongoing. An update on the progress of EC1169 and on the target indication(s) for EC1456 could be out this quarter.
Earnings Whispers?
Our proven model does not conclusively show that Endocyte 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, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Endocyte is 0.00% since the Most Accurate Estimate is a loss of 23 cents, in line with the Zacks Consensus Estimate.
Zacks Rank #2 (Buy): Endocyte’s Zacks Rank #2, when combined with a 0.00% ESP, makes surprise prediction difficult.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post a beat this quarter.
Isis Pharmaceuticals, Inc. (ISIS) has an earnings ESP of +33.33% and carries a Zacks Rank #2. It is expected to report fourth-quarter results on Feb 27.
Impax Laboratories Inc. (IPXL) has an earnings ESP of +27.27% and carries a Zacks Rank #1. It is expected to report fourth-quarter results on Feb 24.
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