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Proteostasis (PTI) to Post Q2 Earnings: What's in Store?

Zacks Equity Research

Investors will focus on Proteostasis Therapeutics, Inc.’s PTI studies on triple combination regimes for cystic fibrosis, when it reports second-quarter 2019 results.

The company’s performance over the previous four quarters has been mixed, beating earnings estimates in two. The average positive surprise over the trailing four quarters is 10.76%. In the last reported quarter, Proteostasis delivered a positive surprise of 34.88%.

Shares of the company have plunged 74.6% so far this year while the industry showed no movement.

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

Factors to Consider

Proteostasis has been developing its proprietary triple combination candidates — PTI-801, a cystic fibrosis transmembrane conductance regulator (CFTR) corrector; PTI-808, a CFTR potentiator; and PTI-428, a CFTR amplifier.

In March, Proteostasis announced disappointing data from a dose-selecting phase I program on its triple combination candidates in patients with cystic fibrosis (CF). Data showed that a statistically significant improvement in percent predicted FEV1 (ppFEV1), measurement of lung function, at day 14 was achieved in the study cohort with a higher dose of the company’s CFTR corrector. However, the uptrend was much lower than what was attained by the triple combinations of Vertex Pharmaceuticals VRTX in late-stage clinical analyses of the treatment of CF.

In July 2019, the company announced that the first patient has been dosed in the 28-day phase II study evaluating its CFTR modulator combinations in F508del homozygous and heterozygous CF subjects. The ongoing phase II study will explore efficacy over a longer duration and in additional genotypes, including subjects heterozygous for the F508del mutation with Proteostasis’ doublet and triplet combinations. We expect the company to provide updates on the same during the second-quarter earnings call.

In June, the European Commission (EC) granted Orphan Drug designation (ODD) to PTI-428 for the treatment of cystic fibrosis. We expect management to provide an update on the same during the upcoming earnings call.

Earnings Whispers

The proven Zacks model does not conclusively show that Proteostasis is likely to beat estimates this earnings season. 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) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Proteostasis has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 35 cents each. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Proteostasis currently carries a Zacks Rank #3, which increases the predictive power of ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

 

Proteostasis Therapeutics, Inc. Price and Consensus

 

Proteostasis Therapeutics, Inc. Price and Consensus

Proteostasis Therapeutics, Inc. price-consensus-chart | Proteostasis Therapeutics, Inc. Quote

 

Stocks That Warrant a Look

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

Regeneron Pharmaceuticals, Inc. REGN has an Earnings ESP of +3.64% and a Zacks Rank #3. The company is scheduled to release second-quarter 2019 results on Aug 6.

Allergan plc. AGN has an Earnings ESP of +2.74% and a Zacks Rank #3.

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