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BioMarin (BMRN) May Beat in Q2 Earnings: Stock to Gain?
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BioMarin Pharmaceutical Inc. (BMRN - Free Report) is scheduled to report second-quarter 2016 results on Aug 4, after the market closes. BioMarin’s track record has been so far decent with the company beating estimates in three of the last four quarters. Yet, the company has recorded an average negative miss of 7.48% over the trailing four quarters.
In the last reported quarter, the company had delivered a positive earnings surprise of 58.82%. Let’s see how things are shaping up for this quarter.
Factors to Consider This quarter
Key drugs, Vimizim and Kuvan, which drove BioMarin’s top line in the first quarter of 2016, should continue to boost the company’s performance this quarter as well.
On the first-quarter call, BioMarin noted that Vimizim’s sales performance was particularly strong in the EMEA region, as clinical trial patients in the UK converted to commercial therapy. The company has also benefited from penetration in additional markets. Due to increased patient penetration as well as contribution from new smaller markets, BioMarin raised the 2016 Vimizim sales guidance to $315–$340 million (old guidance: $300–$330 million) at the time of announcing first-quarter 2016 results. Meanwhile, the product should continue to perform well with existing and new patient referrals converting to commercial therapy.
While Kuvan’s North American sales continued to benefit from growth in new patients coupled with high levels of adherence, the company has started receiving orders directly from the majority of top international markets across the world following the drug’s global acquisition rights.
On the flip side, Naglazyme revenues vary on a quarterly basis primarily due to the timing of central government orders from Latin America. Nevertheless, the drug’s patient growth increased 8.5% year over year in the first quarter of 2016 and is expected to demonstrate steady growth.
Operating expenses at the company are expected to rise sequentially.
During the quarter, BioMarin announced that it has decided to discontinue the clinical and regulatory development of Kyndrisa for the treatment of Duchenne muscular dystrophy amenable to exon 51 skipping. The decision followed the company’s discussions with the European Medicines Agency’s Committee for Medicinal Products for Human Use, which hinted at the issuance of a negative opinion. The FDA had also issued a complete response letter for Kyndrisa in Jan 2016.
On the second-quarter call, focus will be on the company’s performance along with that of the marketed products. Updates regarding the company’s pipeline will be another area of key focus.
Why a Likely Positive Surprise?
For the second quarter of 2016, our proven model shows that BioMarin is likely to beat estimates because it has the right combination of two key ingredients.
Positive Zacks ESP:Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +4.00%. This is a meaningful and leading indicator of a likely positive surprise for the shares.
Zacks Rank #3 (Hold): Note that stocks with a Zacks Ranks #1 (Strong Buy), #2 (Buy) and #3 have a significantly higher chance of beating estimates. However, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The combination of BioMarin’s Zacks Rank #3 and +4.00% ESP makes us reasonably confident of a beat this season.
BioMarin is not the only company looking up this earnings season. Here are some other health care stocks that you may want to consider as our model shows that they too have the right combination of elements to post an earnings beat this quarter.
Exelixis, Inc. (EXEL - Free Report) has an Earnings ESP of +3.70% and carries a Zacks Rank #3. The company is scheduled to report second-quarter results on Aug 3.
Conatus Pharmaceuticals Inc. has an Earnings ESP of +5.41% and a Zacks Rank #3. The company is also scheduled to release second-quarter results on Aug 3.
Intercept Pharmaceuticals, Inc. has an Earnings ESP of +5.05% and carries a Zacks Rank #3. It is scheduled to report second-quarter results on Aug 4.
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BioMarin (BMRN) May Beat in Q2 Earnings: Stock to Gain?
BioMarin Pharmaceutical Inc. (BMRN - Free Report) is scheduled to report second-quarter 2016 results on Aug 4, after the market closes. BioMarin’s track record has been so far decent with the company beating estimates in three of the last four quarters. Yet, the company has recorded an average negative miss of 7.48% over the trailing four quarters.
In the last reported quarter, the company had delivered a positive earnings surprise of 58.82%. Let’s see how things are shaping up for this quarter.
Factors to Consider This quarter
Key drugs, Vimizim and Kuvan, which drove BioMarin’s top line in the first quarter of 2016, should continue to boost the company’s performance this quarter as well.
On the first-quarter call, BioMarin noted that Vimizim’s sales performance was particularly strong in the EMEA region, as clinical trial patients in the UK converted to commercial therapy. The company has also benefited from penetration in additional markets. Due to increased patient penetration as well as contribution from new smaller markets, BioMarin raised the 2016 Vimizim sales guidance to $315–$340 million (old guidance: $300–$330 million) at the time of announcing first-quarter 2016 results. Meanwhile, the product should continue to perform well with existing and new patient referrals converting to commercial therapy.
While Kuvan’s North American sales continued to benefit from growth in new patients coupled with high levels of adherence, the company has started receiving orders directly from the majority of top international markets across the world following the drug’s global acquisition rights.
On the flip side, Naglazyme revenues vary on a quarterly basis primarily due to the timing of central government orders from Latin America. Nevertheless, the drug’s patient growth increased 8.5% year over year in the first quarter of 2016 and is expected to demonstrate steady growth.
Operating expenses at the company are expected to rise sequentially.
During the quarter, BioMarin announced that it has decided to discontinue the clinical and regulatory development of Kyndrisa for the treatment of Duchenne muscular dystrophy amenable to exon 51 skipping. The decision followed the company’s discussions with the European Medicines Agency’s Committee for Medicinal Products for Human Use, which hinted at the issuance of a negative opinion. The FDA had also issued a complete response letter for Kyndrisa in Jan 2016.
On the second-quarter call, focus will be on the company’s performance along with that of the marketed products. Updates regarding the company’s pipeline will be another area of key focus.
Why a Likely Positive Surprise?
For the second quarter of 2016, our proven model shows that BioMarin is likely to beat estimates because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +4.00%. This is a meaningful and leading indicator of a likely positive surprise for the shares.
Zacks Rank #3 (Hold): Note that stocks with a Zacks Ranks #1 (Strong Buy), #2 (Buy) and #3 have a significantly higher chance of beating estimates. However, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The combination of BioMarin’s Zacks Rank #3 and +4.00% ESP makes us reasonably confident of a beat this season.
BIOMARIN PHARMA Price and EPS Surprise
BIOMARIN PHARMA Price and EPS Surprise | BIOMARIN PHARMA Quote
Other Stocks That Warrant a Look
BioMarin is not the only company looking up this earnings season. Here are some other health care stocks that you may want to consider as our model shows that they too have the right combination of elements to post an earnings beat this quarter.
Exelixis, Inc. (EXEL - Free Report) has an Earnings ESP of +3.70% and carries a Zacks Rank #3. The company is scheduled to report second-quarter results on Aug 3.
Conatus Pharmaceuticals Inc. has an Earnings ESP of +5.41% and a Zacks Rank #3. The company is also scheduled to release second-quarter results on Aug 3.
Intercept Pharmaceuticals, Inc. has an Earnings ESP of +5.05% and carries a Zacks Rank #3. It is scheduled to report second-quarter results on Aug 4.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>