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What's in Store for Adverum (ADVM) in Q1 Earnings?

Zacks Equity Research

Adverum Biotechnologies, Inc ADVM is expected to report first-quarter 2017 results later this month. In the last reported quarter, Adverum posted a negative surprise of 8%.

In fact, the company has a dismal track record with the company missing estimates in three of the last four quarters, bringing the average negative earnings surprise to 17.4%.

Also, Adverum’s share price movement year to date indicates that the stock has underperformed the Zacks classified Medical-Biomedical/Genetics industry. The company’s shares have lost 3.5% as against the industry’s gain of 5.5%.

Factors Influencing the Quarter

Being a development-stage biotech company, Adverum does not have any approved product in its portfolio. Investors are thus expected to keep an eye on the company’s pipeline development.

Currently, Adverum is focused on three lead gene therapy programs like wet AMD, rare diseases alpha 1 antitrypsin (A1AT) deficiency and hereditary angioedema (HAE). The Annapurna acquisition (May 2016) added a number of early-stage candidates to Adverum’s portfolio including ANN-043 (ADVM-001), ANN-053 (ANN-002) and ANN-003 among others.

Additionally, the company is progressing with the pre-clinical development of new anti-VEGF gene therapy candidates, ADVM-022 and ADVM-032, in the wet AMD space. In fact, Adverum met with the FDA in Feb 2017 and plans to initiate investigational new drug (IND)-enabling toxicology and biodistribution studies in the first half of 2017 to support a planned IND filing for ADVM-022 and continues to review data for ADVM-032.

Adverum is also advancing ADVM-043 for the treatment of alpha 1 antitrypsin deficiency (A1AT). The company plans to meet with the FDA in the first half of 2017 to review its development plan for the candidate and initiate patient enrollment in a phase I/II trial in fourth-quarter 2017.

Moreover, it is evaluating ADVM-053 to treat hereditary angioedema (HAE) and plans to initiate toxicology studies for ADVM-053 in the first half of 2017.

Meanwhile, Adverum has a collaboration agreement with Regeneron Pharmaceuticals, Inc. REGN for the joint development of novel candidates based on the former’s Ocular BioFactory platform. In February 2017, Adverum was notified by Regeneron that it is extending the term of the companies’ research collaboration by three years till May 1, 2020.

It has also collaborated with Editas Medicine, Inc. for exploring the delivery of genome editing medicines to treat inherited retinal diseases. These collaborations constitute an important source of funds for Adverum.

Earnings Whispers

Our proven model does not conclusively show earnings beat for Adverum 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 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 the Most Accurate estimate is in line with the Zacks Consensus Estimate of a loss of 26 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Adverum’s Zacks Rank #3 increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

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

Adverum Biotechnologies, Inc. Price and EPS Surprise


Adverum Biotechnologies, Inc. Price and EPS Surprise | Adverum Biotechnologies, Inc. Quote

Stocks to Consider

Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:

Fibrogen Inc. FGEN has an Earnings ESP of +23.81% and a Zacks Rank #3. The company is expected to release results on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

Editas Medicine, Inc. EDIT has an Earnings ESP of +33.33% and a Zacks Rank #3. The company is expected to release results on May 15.

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Regeneron Pharmaceuticals, Inc. (REGN): Free Stock Analysis Report
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