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What's in Store for GW Pharmaceuticals (GWPH) in Q3 Earnings?

Zacks Equity Research

GW Pharmaceuticals plc GWPH is slated to release third-quarter 2019 results on Nov 5.

In the last reported quarter, it posted a positive earnings surprise of 64.9%. The company reported better-than-expected earnings in all of the trailing four quarters, the average surprise being +26.7%.

Let's discuss the factors that are likely to get reflected in the upcoming quarterly results.

GW Pharmaceuticals PLC Price and EPS Surprise


GW Pharmaceuticals PLC Price and EPS Surprise


GW Pharmaceuticals PLC price-eps-surprise | GW Pharmaceuticals PLC Quote

Key Catalysts

Following the commercial launch of Epidolex in the United States last November as the first cannabis-derived drug for patients with Lennox-Gastaut syndrome (LGS) and Dravet syndrome, there has been no turning back for GW Pharmaceuticals.

Over the past few months, the company has been witnessing continued rise in receptivity and demand for the medicine in the United States and also a huge number of physicians are recommending the same in their prescriptions. The high level of market penetration is likely to have continued in the third quarter as well.

With the growing awareness for LGS and Dravet, resulting from market research conducted on Epidiolex in the second quarter, Epidiolex’s third quarter sales are likely to have gained on high prescription.

The company has been focusing on turning Epidiolex into a leading brand to treat epilepsy. In this regard, the recently received European Commission’s approval regarding the marketing authorization for Epidiolex for patients aging more than two years. This is anticipated to have aided the company’s third quarter revenues.

In terms of coverage determination, the company has been continuing to increase payor access for a while. It earlier expected this to have continued in the third quarter as well.

The company’s third quarter results are expected to reflect the impact of the expansion of the Epidiolex label to TSC on the favorable outcome of Phase 3 trial data for Epidiolex and the treatment of seizures associated with tuberous sclerosis complex.

Sativex, which is used to treat muscle spasms, has been gaining popularity. The company expects this to get reflected in its performance in the to-be-reported quarter. The CBDV program, which has been performing well, is expected to have continued its strong performance in the third quarter as well.

Which Way Are Estimates Treading?

The Zacks Consensus Estimate for total revenues of $88.3 million suggests growth of $2.4 million from the prior-year quarter’s reported figure. However, the consensus mark for loss per share is pegged at 85 cents, indicating 69.2% improvement from the year-ago quarter's reported figure.

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for GW Pharmaceuticals this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: GW Pharmaceuticals has an Earnings ESP of +10.06%.

Zacks Rank: GW Pharmaceuticals currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering, as these too have the right combination of elements to post an earnings beat this quarter.

AMAG Pharmaceuticals, Inc AMAG currently has an Earnings ESP of +9.76% and a Zacks Rank #2.

Deciphera Pharmaceuticals, Inc DCPH presently has an Earnings ESP of +5.46% and a Zacks Rank #1.

ViewRay, Inc VRAY currently has an Earnings ESP of +14.36% and a Zacks Rank #2.

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