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What's in Store for Immune Design (IMDZ) in Q4 Earnings?

Zacks Equity Research

Immune Design Corp IMDZ is scheduled to report fourth-quarter 2016 results after the market closes on Mar 7.

In the last reported quarter, Immune Design posted a positive surprise of 15.5%. The company reported a wider-than-expected loss in two of the four trailing quarters and a narrower-than-expected loss on the two other occasions, bringing the positive average surprise to 1.0%. Let’s see how things are shaping up for this announcement.

Immune Design’s shares have underperformed the Medical-Drugs industry in the past one year. The stock crashed 54.9% during this period, compared to the industry’s gain of 6.4%.

Factors in Play

Being a development-stage biopharmaceutical company, Immune Design has not generated any product revenues yet. The company earns revenues from collaboration and licensing agreements and product sales.

Investors remain focussed on the company’s progress with its pipeline candidates. Immune Design is developing multiple candidates using its two discovery platforms – ZVex and GLAAS – for the treatment of various types of cancers. Key pipeline candidates include CMB305 (solid tumor) and G100 (merkel cell carcinoma).

CMB305 is currently undergoing an expansion study as a single agent in patients diagnosed with cancers expressing the NY-ESO-1 tumor antigen.

In addition, a randomized phase II study on CMB305, in combination with Roche Holding’s RHHBY Tecentriq in comparison with Tecentriq alone, for locally advanced, relapsed or metastatic soft tissue sarcoma is currently underway. Enrollment in this study is ongoing and the data is expected in 2017.

The company completed enrollment in a phase I single agent trial on LV305 in 24 patients with advanced or metastatic sarcoma expressing NY-ESO-1.  Meanwhile, an additional division of this trial has been designed to evaluate the use of LV305 with Merck’s MRK anti-PD-1 agent, Keytruda in patients with melanoma who have an inadequate response to anti-PD1 therapy.

The company has also completed enrollment in its phase I trial on G100, in combination with radiation, in patients with merkel cell carcinoma.  The FDA recently granted orphan drug designation to G100, for the treatment of follicular non-Hodgkin’s lymphoma.

Meanwhile, Immune Design is also evaluating G100 in combination with Merck’s anti-PD-1 agent Keytruda, for the treatment of patients with non-Hodgkin’s lymphoma. The safety and efficacy of G100 in combination with low-dose local radiation and Keytruda, in patients with follicular non-Hodgkin’s lymphoma (NHL) is being evaluated in a randomized phase II study with the ongoing enrollment. Data is expected later in 2017.

Due to numerous ongoing trials, operating expenses are expected to remain high in the quarter. We expect the company to shed light on its progress with these trials during the earnings call.

What Our Model Indicates

Our proven model does not conclusively show that Immune Design 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. This 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 both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 57 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although Immune’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Immune Design Corp. Price and EPS Surprise


Immune Design Corp. Price and EPS Surprise | Immune Design Corp. Quote

Stocks to Consider

Here is one healthcare company that you may consider instead, as our model shows that it has the right combination of elements to post an earnings beat this quarter.

Spectrum Pharmaceuticals, Inc. SPPI has an Earnings ESP of 15.4% and a Zacks Rank #3. The company is expected to release results on Mar 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Roche Holding AG (RHHBY): Free Stock Analysis Report
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