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Trevena (TRVN) to Post Q1 Earnings: What Awaits the Stock?

Zacks Equity Research

Investor focus will be on Trevena, Inc.’s TRVN efforts to support the development of its pain therapy, oliceridine injection, when the company reports first-quarter 2019 earnings.

Trevena’s performance over the last four quarters has been encouraging so far with the company’s earnings surpassing expectations thrice and missing the mark just once. The average positive surprise over the trailing four quarters is 3.38%. In the last reported quarter, Trevena came up with a negative earnings surprise of 66.67%.

Shares of Trevena have skyrocketed 239.5% in the year so far, outperforming the industry’s increase of 2.2%.

Let’s see how things are shaping up for the upcoming quarterly results.

Factors to Consider

Trevena’s top line mainly consists of license and collaboration revenues associated with the licensing agreements for oliceridine. The company has been working diligently on the development of its pain therapy candidate, oliceridine injection.

Oliceridine is an opioid-based analgesic administered intravenous and also a G protein biased ligand of the mu receptor, which is being developed for managing moderate-to-severe acute pain.

In January this year, Trevena announced the receipt of the Type A meeting minutes from the FDA with respect to the oliceridine complete response letter (CRL), issued last November. Following this, the regulatory agency agreed with the current safety database and will support labeling at a maximum daily dose of 27 mg. Post this feedback, Trevena submitted a detailed protocol and an analysis plan to the FDA, planning to initiate a study in the first half of 2019 and a path forward to resubmit the oliceridine NDA.

We expect management to provide an update on the same during the upcoming investors’ call.

Meanwhile, Trevena is also developing two G protein biased ligand candidates — TRV250 as a non-narcotic treatment for migraine and a partnership with the National Institute on Drug Abuse (NIDA) for TRV734 — to treat moderate-to-severe acute and chronic pain. Both candidates are in early-stage development.

In the fourth quarter of 2018, Trevena unveiled its candidate TRV045 — a novel S1P modulator — which is under evaluation for the non-opioid treatment of chronic pain. The company plans to file an investigational new drug application on the product this year.

We expect investors’ focus to be on the company’s pipeline progress during the upcoming earnings call.

Earnings Whispers

Our proven model does not conclusively show that Trevena is likely to beat on earnings this reporting cycle. This is because the 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: Trevena 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 9 cents each. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Trevena sports a Zacks Rank of 1, which increases the predictive power of ESP. However, a 0.00% ESP in the combination makes surprise prediction difficult for the stock this earnings season.

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

Trevena, Inc. Price and EPS Surprise

Trevena, Inc. Price and EPS Surprise | Trevena, Inc. Quote

Stocks That Warrant a Look

Here are a few health care stocks worth considering as our model shows that these have the right mix of elements to beat estimates this time around.

Aduro Biotech, Inc. ADRO has a Zacks Rank #2 and an Earnings ESP of +82.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Incyte Corporation INCY has an Earnings ESP of +14.47% and a Zacks Rank of 1. The company is scheduled to release first-quarter results on Apr 30, before the market opens.

Gilead Sciences, Inc. GILD has a Zacks Rank of 2 and an Earnings ESP of +1.37%. The company is scheduled to release first-quarter results on May 2, after the market closes.

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