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BioDelivery (BDSI) Q2 Earnings: Will the Stock Disappoint?
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BioDelivery Sciences International, Inc. is scheduled to report second-quarter 2016 results on Aug 9, before the opening bell. Last quarter, the company’s loss was in-line with expectations. Let’s see how things are shaping up for the second quarter of 2016.
Factors at Play
BioDelivery’s key products include Belbuca (chronic pain) and Bunavail (opioid-dependence). Bunavail’s performance remains lackluster with the product seeing a sequential decline in scrips in the first quarter of 2016.
With the product not yielding the expected results, BioDelivery has decided to reduce spending on the drug. From May 2016, BioDelivery cut the size and altered the structure of its sales force to focus on the most profitable territories in the areas of the country where Bunavail has or is in the best position to obtain marketplace growth. This move has resulted in a reduction from sixty-five to forty territories. The company will end its contract sales agreement with Quintiles as well.
Meanwhile, Belbuca’s start has also been slower than expected due to pain market pressures. On the first quarter call, BioDelivery said that its partner Endo International plc expects an inflection point in the second half of 2016.
Apart from the performance of these two products and the company’s cost-control efforts, investor focus will remain on the pipeline.
Surprise History
BioDelivery’s performance so far has been disappointing with the company missing expectations in three of the last four quarters while posting in-line results in the remaining quarter. The average earnings surprise over the last four quarters is -24.43%.
Our proven model does not conclusively show that BioDelivery is likely to beat estimates this quarter. That 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 likely post a beat. But that 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 a loss of 31 cents.
Zacks Rank: BioDelivery currently carries a Zacks Rank #3. Although the company’s Zacks Rank #3 enhances the predictive power of the ESP, its 0.00% ESP makes a surprise prediction difficult.
Note that 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.
Stocks That Warrant a Look
Here are a few 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.
Incyte Corporation (INCY - Free Report) has an Earnings ESP of +300.00% and carries a Zacks Rank #2. It will be reporting second-quarter results on Aug 9.
Impax Laboratories Inc. has an Earnings ESP of +3.03% and carries a Zacks Rank #2. It will be reporting second-quarter results on Aug 9.
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BioDelivery (BDSI) Q2 Earnings: Will the Stock Disappoint?
BioDelivery Sciences International, Inc. is scheduled to report second-quarter 2016 results on Aug 9, before the opening bell. Last quarter, the company’s loss was in-line with expectations. Let’s see how things are shaping up for the second quarter of 2016.
Factors at Play
BioDelivery’s key products include Belbuca (chronic pain) and Bunavail (opioid-dependence). Bunavail’s performance remains lackluster with the product seeing a sequential decline in scrips in the first quarter of 2016.
With the product not yielding the expected results, BioDelivery has decided to reduce spending on the drug. From May 2016, BioDelivery cut the size and altered the structure of its sales force to focus on the most profitable territories in the areas of the country where Bunavail has or is in the best position to obtain marketplace growth. This move has resulted in a reduction from sixty-five to forty territories. The company will end its contract sales agreement with Quintiles as well.
Meanwhile, Belbuca’s start has also been slower than expected due to pain market pressures. On the first quarter call, BioDelivery said that its partner Endo International plc expects an inflection point in the second half of 2016.
Apart from the performance of these two products and the company’s cost-control efforts, investor focus will remain on the pipeline.
Surprise History
BioDelivery’s performance so far has been disappointing with the company missing expectations in three of the last four quarters while posting in-line results in the remaining quarter. The average earnings surprise over the last four quarters is -24.43%.
BIODELIVERY SCI Price and EPS Surprise
BIODELIVERY SCI Price and EPS Surprise | BIODELIVERY SCI Quote
What Our Model Indicates
Our proven model does not conclusively show that BioDelivery is likely to beat estimates this quarter. That 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 likely post a beat. But that 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 a loss of 31 cents.
Zacks Rank: BioDelivery currently carries a Zacks Rank #3. Although the company’s Zacks Rank #3 enhances the predictive power of the ESP, its 0.00% ESP makes a surprise prediction difficult.
Note that 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.
Stocks That Warrant a Look
Here are a few 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.
Incyte Corporation (INCY - Free Report) has an Earnings ESP of +300.00% and carries a Zacks Rank #2. It will be reporting second-quarter results on Aug 9.
Impax Laboratories Inc. has an Earnings ESP of +3.03% and carries a Zacks Rank #2. It will be reporting second-quarter 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 >>