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Will Juno Therapeutics (JUNO) Disappoint in Q3 Earnings?
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Juno Therapeutics Inc. will be reporting third-quarter 2016 results on Nov 9, after the market closes. Last quarter, the company posted a negative earnings surprise of 27.5%.
The company started trading in Dec 2014. So far, it has had a poor track record, with the company posting negative surprises thrice in the last four quarters and meeting estimates only once. The average negative earnings surprise over the last four quarters is 12.8%.
With no approved products in its portfolio, Juno does not generate any product revenue yet. So, investor focus will primarily be on the company’s cash burn and pipeline updates.
Juno is looking to revolutionize cancer treatments by engaging the body’s immune system to fight cancer. In doing so, the company is developing cell-based cancer immunotherapies based on CAR and high-affinity TCR technologies. This is a hot therapeutic area with huge commercial potential.
However, the company faced a major setback related to the development of its lead pipeline candidate, JCAR015. In Jul 2016, the FDA placed a clinical hold on the company’s phase II study (ROCKET) on JCAR015 in adult patients with relapsed or refractory B cell acute lymphoblastic leukemia (r/r ALL). The hold was placed after two patients died within the span of a week due to severe neurotoxicity following the addition of fludarabine to the pre-conditioning regimen.
The hold was lifted a week later and the study has thereafter resumed under a revised protocol.
However, results from a phase I study presented in early Jun 2016 showed that JCAR015 led to a complete remission rate of 82% in 50 evaluable patients. The results also demonstrate a marked improvement over historical results with salvage chemotherapy.
We note that at the time of releasing its second-quarter results, Juno had revealed its expectations of cash burn of $220–$250 million in 2016.
Juno has several other interesting candidates in its pipeline, which along with its collaborations with companies like Celgene Corporation for the global development and commercialization of immunotherapies, bode well.
Earnings Whispers
Our proven model does not conclusively show that Juno is likely to beat earnings 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) for this to happen. 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 64 cents.
Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Zacks Rank:Juno Therapeutics currently carries a Zacks Rank #4. As it is, we caution against Sell-rated stocks (#4 or #5) going into the earnings announcement.
Stocks That Warrant a Look
Here are a couple of companies you may want to consider instead as our model shows that they have the right combination of elements to post an earnings beat this quarter:
ACADIA Pharmaceuticals Inc. (ACAD - Free Report) has an Earnings ESP of +5.46% and a Zacks Rank #3. The company is scheduled to report third-quarter results on Nov 7.
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Will Juno Therapeutics (JUNO) Disappoint in Q3 Earnings?
Juno Therapeutics Inc. will be reporting third-quarter 2016 results on Nov 9, after the market closes. Last quarter, the company posted a negative earnings surprise of 27.5%.
The company started trading in Dec 2014. So far, it has had a poor track record, with the company posting negative surprises thrice in the last four quarters and meeting estimates only once. The average negative earnings surprise over the last four quarters is 12.8%.
JUNO THERAPEUTC Price and EPS Surprise
JUNO THERAPEUTC Price and EPS Surprise | JUNO THERAPEUTC Quote
Factors at Play
With no approved products in its portfolio, Juno does not generate any product revenue yet. So, investor focus will primarily be on the company’s cash burn and pipeline updates.
Juno is looking to revolutionize cancer treatments by engaging the body’s immune system to fight cancer. In doing so, the company is developing cell-based cancer immunotherapies based on CAR and high-affinity TCR technologies. This is a hot therapeutic area with huge commercial potential.
However, the company faced a major setback related to the development of its lead pipeline candidate, JCAR015. In Jul 2016, the FDA placed a clinical hold on the company’s phase II study (ROCKET) on JCAR015 in adult patients with relapsed or refractory B cell acute lymphoblastic leukemia (r/r ALL). The hold was placed after two patients died within the span of a week due to severe neurotoxicity following the addition of fludarabine to the pre-conditioning regimen.
The hold was lifted a week later and the study has thereafter resumed under a revised protocol.
However, results from a phase I study presented in early Jun 2016 showed that JCAR015 led to a complete remission rate of 82% in 50 evaluable patients. The results also demonstrate a marked improvement over historical results with salvage chemotherapy.
We note that at the time of releasing its second-quarter results, Juno had revealed its expectations of cash burn of $220–$250 million in 2016.
Juno has several other interesting candidates in its pipeline, which along with its collaborations with companies like Celgene Corporation for the global development and commercialization of immunotherapies, bode well.
Earnings Whispers
Our proven model does not conclusively show that Juno is likely to beat earnings 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) for this to happen. 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 64 cents.
Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Zacks Rank:Juno Therapeutics currently carries a Zacks Rank #4. As it is, we caution against Sell-rated stocks (#4 or #5) going into the earnings announcement.
Stocks That Warrant a Look
Here are a couple of companies you may want to consider instead as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Ariad Pharmaceuticals Inc. is scheduled to report earnings on Nov 7.The company has an Earnings ESP of +5.26% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
ACADIA Pharmaceuticals Inc. (ACAD - Free Report) has an Earnings ESP of +5.46% and a Zacks Rank #3. The company is scheduled to report third-quarter results on Nov 7.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>