What's in the Cards for Ionis (IONS) This Earnings Season?

Ionis Pharmaceuticals IONS is scheduled to report fourth-quarter 2017 results on Feb 27, before market opens.

Last quarter, the company delivered a negative earnings surprise of 100%. The company has a disappointing track record and missed estimates twice in the four trailing quarters while beating the same on two occasions, delivering an average negative earnings surprise of 6.67%.

Notably, Ionis’ share price has increased 12.4% in the past year, compared with the Zacks classified industry’s decline of 0.3%.

Let’s see how things are shaping up for this announcement.

Earnings Whispers

Our proven model does not conclusively show that Ionis 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 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 8 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although Ionis’ Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Factors to Consider

Ionis earns revenues in the form of upfront, milestone and other payments under its partnerships with leading health care companies like Biogen BIIB.

Ionis and Biogen received FDA approval for Spinraza in December 2016 for treating spinal muscular atrophy (“SMA”). The drug was approved in Europe in June 2017 as the first treatment for SMA. Ionis and Biogen have collaborated to develop and commercialize Spinraza and Ionis earns royalties on Spinraza sales from Biogen.

Last week, Biogen released its fourth-quarter 2017 results and announced that Spinraza has witnessed strong demand globally driving sales. The company is evaluating the drug in two clinical studies to reinforce the favorable efficacy and safety profile.

Ionis earned $70 million during the quarter in milestone and license fees from several drug companies related to initiation of clinical studies or license transfer of pipeline candidates.

In December 2017, Ionis and Biogen entered into a collaboration agreement to identify new antisense oligonucleotide drug candidates for treating SMA.

Apart from Spinraza, we expect investor focus to be on pipeline updates on the fourth-quarter conference call.

During the quarter, Ionis and Akcea submitted regulatory applications to the European Medicines Agency (“EMA”) and the FDA for Inotersen for the treatment of patients with hereditary TTR amyloidosis (hATTR). The regulatory application in Europe will be reviewed under Accelerated Assessment program and the FDA has also granted priority review in January 2018. These suggest faster review of the applications.

Marketing application for another pipeline candidate, Volanesorsen, for the treatment of patients with familial chylomicronemia syndrome (“FCS”) is under review in the United States, Europe and Canada.

Ionis has several mid-stage pipeline candidates for various indications. We expect the company to provide updates on different studies, including the path forward for Inotersen and Volanesorsen, on the fourth-quarter earnings call.

Ionis Pharmaceuticals, Inc. Price and EPS Surprise

 

Ionis Pharmaceuticals, Inc. Price and EPS Surprise | Ionis Pharmaceuticals, Inc. Quote

Stocks That Warrant a Look

Here are a couple of health care stocks that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter.

Atara Biotherapeutics, Inc. ATRA is expected to release results on Mar 8. The company has an Earnings ESP of +7.42% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Gemphire Therapeutics GEMP is expected to release results on Mar 21. The company has an Earnings ESP of +6.62% and a Zacks Rank #1.

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