Endocyte, Inc ECYT is expected to report fourth-quarter 2016 results on Mar 1. The company has an impressive track record, having beaten estimates on three of the trailing four quarters and reporting in-line results in the remaining quarter. Overall, the company has recorded an average positive surprise of 10.2%.
In the last reported quarter, Endocyte posted a positive surprise of 22.2%. Let's see how things are shaping up for this quarter.
Endocyte’s share price movement shows that the stock has underperformed the Zacks classified Medical-Drugs industry in the last one year.
The stock has lost close to 33.7% during this timeframe in comparison to a loss of approximately 0.1% recorded by the industry.
Factors at Play
Being a development-stage biotech company, Endocyte does not have any approved product in its portfolio. Investors are thus expected to keep an eye on the company’s pipeline development. Endocyte's pipeline presently comprises EC1456 and EC1169.
Both EC1456 and EC1169 have demonstrated anti-tumor activity during the dose-escalation period of their respective phase I studies.
Data from the dose escalation phase of the EC1169 trial showed that total target tumor burden reduction was observed in four of the six patients with measurable soft tissue disease treated at doses of 3.8 mg/m2 and higher. The results further showed that EC1169 was well tolerated without causing dose-limiting hematologic toxicity frequently associated with traditional chemotherapy.
Consequently, Endocyte has determined 6.5 mg/m2 once per week as the maximum clinical dose and is moving into the expansion phase where 2 cohorts of metastatic castration resistant prostate cancer (mCRPC) patients will be evaluated. While one cohort will include patients who previously received a taxane-based therapy, the other will be of taxane-naïve patients.
Meanwhile, the company has also progressed with the expansion of phase I study on EC1456 using its companion imaging agent, etarfolatide, to select folate receptor-positive non-small cell lung cancer patients. A dose of 6.0 mg/m2 twice per week is being used in the expansion phase of the study.
We expect R&D expenses to be higher as the company continues with the dose-escalation studies on EC1456 and EC1169. Endocyte revised its cash balance guidance with the third-quarter results. The company now expects cash balance to be above $135 million at the end of 2016 (previous projection: above $130 million).
What Our Model Indicates
Our proven model does not conclusively show that Endocyte 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: The 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 27 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Endocyte's Zacks Rank #3, when combined with its 0.00% ESP, makes surprise prediction difficult.
Concurrently, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Endocyte, Inc. Price and EPS Surprise
Endocyte, Inc. Price and EPS Surprise | Endocyte, Inc. Quote
Stocks That Warrant a Look
Here are some health care stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.
Pacira Pharmaceuticals, Inc. PCRX is expected to release results on Mar 1. The company has an Earnings ESP of +20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Exelixis, Inc. EXEL is +200% and it carries a Zacks Rank #2. The company is slated to release results on Feb 27.
Tesaro, Inc. TSRO has an Earnings ESP of +0.51% and a Zacks Rank #3. The company is scheduled to release results on Feb 28.
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