The Zacks Medical sector comprises pharma/biotech as well as medical device companies. Per the Earnings Trends report, the companies from this sector, which reported till May 1 and constitute more than 80% of the sector’s market capitalization, recorded 8.9% earnings growth and 9.1% sales growth year over year. Overall, first-quarter earnings and sales growth of this sector is expected to be 5.6% and 7.2%, respectively. This suggests a decline in earnings and sales for the companies that are yet to report in the current reporting cycle.
The last week was marked by earnings of bigwigs like Merck MRK, Pfizer PFE, Glaxo and Lilly. All these companies beat estimates for first-quarter earnings. Moreover, Pfizer Merck and Lilly raised their guidance for earnings in 2019. While Merck raised its sales guidance for 2019, Pfizer and Glaxo maintained their previous full-year sales forecast. However, Lilly lowered its full-year revenue forecast.
Several of the companies from the pharma/drug/biotech sectors have been facing rising generic/biosimilar competition for their key drugs and issues related to higher drug prices. However, consistent innovation has brought several new drugs, which helped offset declining sales of many legacy drugs.
Let’s take a look at five pharma/biotech companies that are set to report first-quarter 2019 results on May 9.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially when the company is seeing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ionis Pharmaceuticals, Inc. IONS
Ionis, which is scheduled to release earnings before the opening bell, delivered positive earnings surprise of 6,150.00% in the last reported quarter. The company’s earnings beat expectations in each of the last four quarters with the average being 1,541.96%.
For this quarter, Ionis’ Earnings ESP is -47.76% as the Most Accurate Estimate stands at earnings of 22 cents per share while the Zacks Consensus Estimate is pegged at 43 cents. The company currently has a Zacks Rank #3.
Ionis has two marketed products in its portfolio, Spinraza and Tegsedi. Spinraza is riding on strong growth momentum and its sales will likely drive the company’s top line in the first quarter. Strong performance of Tegsedi, launched in 2018, will further boost revenues. However, growth of Tegsedi is yet to be ascertained. The company is currently evaluating four candidates in pivotal studies. Investors are likely to focus on growth of Tegsedi and update on the late-stage pipeline on the first-quarter earnings call.
Ionis Pharmaceuticals, Inc. Price and EPS Surprise
Ionis Pharmaceuticals, Inc. Price and EPS Surprise | Ionis Pharmaceuticals, Inc. Quote
Acceleron Pharma Inc. XLRN
Acceleron is scheduled to announce results after the closing bell. The company beat estimates in three of the past four quarters while missing the same once. Acceleron delivered a negative earnings surprise of 11.94% in the last reported quarter. The company delivered four-quarter average positive earnings surprise of 0.52%. The Zacks Consensus Estimate for the to-be reported quarter is pegged at loss of 67 cents.
The company has an Earnings ESP of +16.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Acceleron is developing its lead candidate, luspatercept, in collaboration with Celgene as a treatment for chronic anemia. Regulatory applications were filed in the United States and Europe last month. The company also has another candidate, sotatercept, which is being developed under this collaboration as a treatment for pulmonary arterial hypertension. With no approved products, investors will likely focus on regulatory updates on the first-quarter earnings call.
Acceleron Pharma Inc. Price and EPS Surprise
Acceleron Pharma Inc. Price and EPS Surprise | Acceleron Pharma Inc. Quote
Blueprint Medicines Corporation BPMC
Blueprint Medicines is expected to report before market open. The company missed estimates in three of the past four quarters while beating the same once. The company delivered average four-quarter positive earnings surprise of 4.08%. In the last reported quarter, the company delivered negative earnings surprise of 8.93%.
The company has an Earnings ESP of 0.00% and a Zacks Rank #2. The Zacks Consensus Estimate for loss per share is pegged at $1.73
The company has no marketed product in its portfolio. It is developing its lead candidate, avapritinib, for various oncological indications. The candidate has been successful in three pivotal studies and Blueprint Medicines is planning to file a new drug application in the second quarter of 2019. We can expect an update on the progress related to regulatory filing on the first-quarter earnings call. Operating expenses are likely to be higher to support regulatory filing and launch initiatives upon potential approval.
Blueprint Medicines Corporation Price and EPS Surprise
Blueprint Medicines Corporation Price and EPS Surprise | Blueprint Medicines Corporation Quote
PDL BioPharma, Inc. PDLI
The company is expected to report after market close. PDL BioPharma delivered positive earnings surprise of 25.00% in the last reported quarter. PDL BioPharma’sperformance has been encouraging with the company reporting positive surprise in all the last four quarters with the average being 38.39%.
The company has an Earnings ESP of 0.00% as the Most Accurate Estimate and Zacks Consensus Estimate are both pegged at 8 cents. The company currently carries a Zacks Rank #1.
The company earns revenues from sale of hypertension drug, Tekturna, LENSAR laser system and royalties on sales of drugs from certain pharma companies. However, revenues and earnings have been on a declining trend, which may be the case in the first quarter as well. The launch of authorized generic version of Tekturna in March may also unfavorably impact the top line. (Read more: PDL BioPharma to Post Q1 Earnings: What's in Store?)
PDL BioPharma, Inc. Price and EPS Surprise
PDL BioPharma, Inc. Price and EPS Surprise | PDL BioPharma, Inc. Quote
Guardant Health, Inc. GH
Guardant, which is scheduled to release earnings after the closing bell, delivered positive earnings surprise of 16.67% in the last reported quarter. The company delivered average negative average surprise of 276.15% in the past four quarters.
For the soon-to-be reported quarter, Guardant’s Earnings ESP is 0.00%. The Zacks Consensus Estimate is pegged at a loss of 35 cents per share. The company currently holds a Zacks Rank #4.
The company’s top line is mainly driven by its Precision oncology testing and development services. In January, Guardant Health launched the LUNAR assay for detection of early-stage cancer and disease recurrence. A strong initial uptake of this test during the first-quarter may boost revenues for the company. (Read more: Guardant Health to Report Q1 Earnings: What's in Store?)
Guardant Health, Inc. Price and EPS Surprise
Guardant Health, Inc. Price and EPS Surprise | Guardant Health, Inc. Quote
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Merck & Co., Inc. (MRK) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Blueprint Medicines Corporation (BPMC) : Free Stock Analysis Report
Acceleron Pharma Inc. (XLRN) : Free Stock Analysis Report
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Ionis Pharmaceuticals, Inc. (IONS) : Free Stock Analysis Report
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