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Ionis Pharmaceuticals (IONS) Q2 Earnings: Stock to Beat?
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Ionis Pharmaceuticals, Inc. (IONS - Free Report) is scheduled to report second-quarter 2016 results on Aug 9. Last quarter, the company recorded a negative earnings surprise of 4.00%. Let’s see how things are shaping up for this announcement.
Factors to Consider
Through partnerships with several leading health care companies like Biogen Inc. (BIIB - Free Report) and GlaxoSmithKline plc (GSK - Free Report) among others, Ionis earns revenues in the form of upfront, milestone and other payments. These agreements also validate the company’s technology platform.
In May 2016, the company entered into an agreement with Kastle Therapeutics, LLC, under which Kastle acquired global rights to develop and commercialize Kynamro. Under the terms of the agreement, Ionis is eligible to receive up to $95 million in upfront payment, $15 million of which will be recognized in the to-be-reported quarter.
We remind investors that the company’s revenues vary on the basis of the timing of payments under the agreements with its partners. In 2016, the company expects to earn meaningful milestone payments related to the development of its candidates.
On the second-quarter call, investor focus should remain on the company’s pipeline development which includes three phase III candidates – IONIS-TTRRx (transthyretin amyloidosis), nusinersen (spinal muscular atrophy in infants and children) and volanesorsen (familial chylomicronemia syndrome and familial partial lipodystrophy). In addition, the company has several early-to-mid stage candidates.
However, in the second quarter, the company received a major blow when Glaxo decided against starting a phase III outcome study – CARDIO-TTR – that was planned to evaluate IONIS-TTRRx in patients with transthyretin (TTR) amyloid cardiomyopathy. The development came in the wake of the FDA placing a clinical hold on CARDIO-TTR due to safety concerns that were raised in the ongoing phase III study, NEURO-TTR.
We expect the company to shed further light on the development of IONIS-TTRRx during its second-quarter earnings announcement.
Surprise History
Ionis’ track record has been disappointing so far. Over the four trailing quarters, the company posted an average negative earnings surprise of 8.79%, having beaten estimates in only one quarter and missed the same thrice.
Our proven model shows that Ionis is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: The Earnings Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +10.71%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank: Note that stocks with Zacks Ranks of #1 (Strong Buy), #2 (Buy) and #3 (Hold) have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5), on the other hand, should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
The combination of Ionis’ favorable Zacks Rank #2 and positive ESP makes us fairly confident of a positive earnings beat on Aug 9.
A Stock to Consider
Here is another health care stock that you may want to consider, as our model shows that it too has the right combination of elements to post an earnings beat this quarter.
Impax Laboratories has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is scheduled to report results on Aug 9.
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Ionis Pharmaceuticals (IONS) Q2 Earnings: Stock to Beat?
Ionis Pharmaceuticals, Inc. (IONS - Free Report) is scheduled to report second-quarter 2016 results on Aug 9. Last quarter, the company recorded a negative earnings surprise of 4.00%. Let’s see how things are shaping up for this announcement.
Factors to Consider
Through partnerships with several leading health care companies like Biogen Inc. (BIIB - Free Report) and GlaxoSmithKline plc (GSK - Free Report) among others, Ionis earns revenues in the form of upfront, milestone and other payments. These agreements also validate the company’s technology platform.
In May 2016, the company entered into an agreement with Kastle Therapeutics, LLC, under which Kastle acquired global rights to develop and commercialize Kynamro. Under the terms of the agreement, Ionis is eligible to receive up to $95 million in upfront payment, $15 million of which will be recognized in the to-be-reported quarter.
We remind investors that the company’s revenues vary on the basis of the timing of payments under the agreements with its partners. In 2016, the company expects to earn meaningful milestone payments related to the development of its candidates.
On the second-quarter call, investor focus should remain on the company’s pipeline development which includes three phase III candidates – IONIS-TTRRx (transthyretin amyloidosis), nusinersen (spinal muscular atrophy in infants and children) and volanesorsen (familial chylomicronemia syndrome and familial partial lipodystrophy). In addition, the company has several early-to-mid stage candidates.
However, in the second quarter, the company received a major blow when Glaxo decided against starting a phase III outcome study – CARDIO-TTR – that was planned to evaluate IONIS-TTRRx in patients with transthyretin (TTR) amyloid cardiomyopathy. The development came in the wake of the FDA placing a clinical hold on CARDIO-TTR due to safety concerns that were raised in the ongoing phase III study, NEURO-TTR.
We expect the company to shed further light on the development of IONIS-TTRRx during its second-quarter earnings announcement.
Surprise History
Ionis’ track record has been disappointing so far. Over the four trailing quarters, the company posted an average negative earnings surprise of 8.79%, having beaten estimates in only one quarter and missed the same thrice.
IONIS PHARMACT Price and EPS Surprise
IONIS PHARMACT Price and EPS Surprise | IONIS PHARMACT Quote
Earnings Whispers
Our proven model shows that Ionis is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: The Earnings Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +10.71%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank: Note that stocks with Zacks Ranks of #1 (Strong Buy), #2 (Buy) and #3 (Hold) have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5), on the other hand, should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
The combination of Ionis’ favorable Zacks Rank #2 and positive ESP makes us fairly confident of a positive earnings beat on Aug 9.
A Stock to Consider
Here is another health care stock that you may want to consider, as our model shows that it too has the right combination of elements to post an earnings beat this quarter.
Impax Laboratories has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is scheduled to report results on Aug 9.
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 >>