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Assertio Therapeutics (ASRT) to Post Q1 Earnings: What's Up?

Zacks Equity Research

Assertio Therapeutics, Inc. ASRT is scheduled to report first-quarter 2019 earnings on May 8, 2019, after the market closes.

The company’s surprise track record has been impressive so far, having delivered an earnings beat in each of the trailing four quarters, the average being 73.86%. In the last reported quarter, Assertio Therapeutics came up with a positive surprise of 66.67%.

Shares of Assertio Therapeutics have surged 30.5% so far this year, outperforming the industry’s rally of 11.1%.

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

Factors to Consider

Assertio Therapeutics’ top line mainly comprises sales of neurology and out-licensed products as well as revenues from royalties and milestones.

The company’s neurology franchise includes Gralise, Zipsor and Cambia. Sales of Gralise have been declining year over year with positive sequential growth in both volumes and net revenues. We expect this trend get reflected in the upcoming quarterly release.

Cambia recorded an all-time high in net sales in fourth-quarter 2018 with a solid uptick in volume. Zipsor sales too have been impressive with a continued sequential strength and expanded volumes in the last reported quarter. We expect this momentum to drive numbers in the impending quarterly report.

The company sold the commercial rights to Nucynta to Collegium Pharmaceutical COLL on Jan 9, 2018 while it divested rights to Lazanda to Slan Medicinal Holdings in November 2017. It receives royalty payments on the sale of these products.

Key Development in Q1

Assertio Therapeutics’ biggest achievement in late 2018 was the new drug application (NDA) filling for its injectable formulation of long-acting cosyntropin. In February this year, the FDA accepted the NDA filling and has set an action date of Oct 19, 2019. The company along with partner West Therapeutic Development, LLC, is seeking an approval for the long-acting cosyntropin with regard to screening patients, presumed to have an adrenocortical insufficiency.

We expect management to provide an update on the same during the upcoming investors’ call.

Earnings Whispers

The proven Zacks model does not conclusively show that Assertio Therapeutics is likely to beat estimates this earnings season. This is because a stock needs to have both a positive Earnings ESP and a top Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Assertio Therapeutics has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate stand at 18 cents each. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Assertio Therapeutics currently sports a Zacks Rank of 1, which increases the predictive power of ESP. However, the company’s 0.00% ESP in the combination makes surprise prediction difficult for the stock this reporting cycle.

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

ASSERTIO THERAPEUTICS, INC Price and EPS Surprise

ASSERTIO THERAPEUTICS, INC Price and EPS Surprise | ASSERTIO THERAPEUTICS, INC Quote

Stocks That Warrant a Look

Here are a few health care stocks worth considering as our model shows that these have the right mix of elements to beat on earnings this time around.

Aduro Biotech, Inc. ADRO has a Zacks Rank #2 and an Earnings ESP of +82.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Horizon Pharma Public Limited Company HZNP has a Zacks Rank #3 and an Earnings ESP of +25.00%. The company is scheduled to report first-quarter 2019 results on May 8.

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