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Genmab (GMAB) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

We expect investors to focus on Danish biotechnology company Genmab AS’ GMAB pipeline updates when it reports second-quarter 2020 results. In the last-reported quarter, the company delivered an earnings surprise of 200.00%.

The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed the same once, with the average surprise being 463.79%.

Genmab’s stock has gained 53.1% so far this year compared with the industry’s increase of 3.6%.

Factors to Note

Genmab derives revenues from royalties on sales of three partnered drugs — J&J’s JNJ blood myeloma drug, Darzalex; Novartis’ NVS leukemia drug, Arzerra, and Horizon Therapeutics’ eye drug, Tepezza. The majority of the company’s revenues comes from blockbuster durg, Darzalex.

J&J reported net sales of $901 million for Darzalex in the second quarter, reflecting an increase of 16.3%. With rise in sales of the drug, Genmab’s royalty revenues are also likely to have increased in the soon-to-be reported quarter. Moreover, Arzerra was approved in January 2020. Arzerra sales are likely to have boosted royalty for Genmab.

Apart from its partnered drugs, Genmab is also developing proprietary pipeline candidates. The lead candidate, tisotumab vedotin, is being developed in three mid-stage studies for cervical cancer, ovarian cancer and solid tumors. The company is also developing several other oncology candidates in earlier stage studies. These ongoing clinical studies are expected to have driven operating expenses higher in the soon-to-be reposted quarter. Investors will likely focus on any updates related to pipeline progress.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Genmab this time around. 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. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (83 cents per share) and the Zacks Consensus Estimate (88 cents per share), is -5.89%.

Zacks Rank: Genmab currently carries a Zacks Rank of 3.

Genmab AS Sponsored ADR Price and Consensus

Genmab AS Sponsored ADR Price and Consensus
Genmab AS Sponsored ADR Price and Consensus

Genmab AS Sponsored ADR price-consensus-chart | Genmab AS Sponsored ADR Quote

Stocks to Consider

Here’s a stock you may want to consider as our model shows that it has the right combination of elements to post an earnings beat this quarter.

AcelRx Pharmaceuticals, Inc. ACRX has an Earnings ESP of +40.74% and carries a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Johnson Johnson (JNJ) : Free Stock Analysis Report
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Genmab AS Sponsored ADR (GMAB) : Free Stock Analysis Report
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