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Axcella (AXLA) to Report Q2 Earnings: What's in the Cards?

·4 min read

Axcella Health Inc. AXLA will provide updates on its pipeline candidates when it releases second-quarter 2020 results.

The company has a mixed track record, delivering an earnings miss in three of the trailing four quarters while beating in one. The four-quarter earnings surprise was 5.60%, on average. In the last reported quarter, Axcella came up with anearnings surprise of 29.35%.

Shares of Axcella have gained 9% in the year so far compared with the industry’s growth of 5%.

Let’s see how things are shaping up for the quarter to be reported.

Factors at Play

Axcella does not have any approved drug in its portfolio. Hence, the focus of the investors in the second-quarter conference call will be on updates on its pipeline.

The company’s lead candidate is AXA1125, being evaluated as a non-alcoholic steatohepatitis (NASH) product candidate for both adult and pediatric patients. The company plans to engage with the FDA to discuss the company’s planned investigational new drugs (IND) application for AXA1125. We expect the company to provide an update on the same along with the second-quarter results.

Another candidate is AXA1665, being evaluated for the treatment of overt hepatic encephalopathy (OHE).

The COVID-19 pandemic may adversely impact the company’s ability to conduct and complete its ongoing studies, including AXA1665-002 and AXA4010-001. The pandemic may also affect the company’s plans to initiate certainplanned studies for AXA1665 and AXA1125 under investigational new drugs (INDs) in a timely manner or at all due to patient or principal investigator recruitment or availability challenges, clinical trial site shutdowns or other interruptions. Furthermore, as a result of the COVID-19 pandemic, the company anticipates  experiencing limitations on the quality, completeness and interpretability of the data that it is able to collect. This islikely to have adversely impactedthe second-quarter results.

Research and development expenses are also likely to have increased in the second quarter due to the ongoing clinical programs.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Axcella this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here as you will see below.

Earnings ESP: Axcella has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at a loss of 57 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks That Warrant a Look

Here are some biotech stocks with the right mix of elements to beat on earnings this time around:

Alkermes Plc. ALKS has an Earnings ESP of +362.51% and a Zacks Rank #3. The company is scheduled to release second-quarter 2020 results on Jul 29.

ACADIA Pharmaceuticals, Inc. ACAD has an Earnings ESP of +8.12% and a Zacks Rank of 3. The company is scheduled to release second-quarter 2020 results on Aug 5.

bluebird bio Inc. BLUE has an Earnings ESP of +69.18% and a Zacks Rank #3. 

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