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What Awaits Aerie Pharmaceuticals (AERI) in Q1 Earnings?
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Aerie Pharmaceuticals, Inc. is scheduled to report first-quarter 2017 results on May 2. Last quarter, the company missed expectations by 33.85%. In fact, Aerie’s performance over the last four quarters has been disappointing. The company reported a wider-than-expected loss in the four trailing quarters, with an average negative surprise of 23.59%.
Aerie’s share price has increased 11.8% year to date, while the Zacks classified Medical-Medical Services industry gained 2.3%.
Factors Influencing This Quarter
With no approved product in its portfolio, Aerie depends heavily on its late-stage candidates-Rhopressa and Roclatan. Hence, we expect investor focus on pipeline updates.
Moving ahead, in the second half of 2017, the company expects to submit regulatory application in the European Union (EU) for its leading candidate, Rhopressa, a once-daily formulation for lowering intraocular pressure (IOP) in patients suffering from open-angle glaucoma and ocular hypertension.
In fact, in Oct 2016 Aerie had withdrawn the new drug application (NDA) in the U.S. for Rhopressa as a third party manufacturing facility in Tampa, FL was not ready for pre-approval inspection. However, the company resubmitted the NDA for Rhopressa on Feb 28, after notification by its contract drug product manufacturer that the vendor’s Tampa, Florida facility is now ready for pre-approval inspection by the FDA. The company expects a twelve-month FDA review process from the date of resubmission and plans to launch it in the second quarter of 2018.
Apart from Rhopressa, Aerie is also evaluating Roclatan, a once-daily, quadruple-action fixed-dose combination of Rhopressa and Xalatan (latanoprost). Roclatan is currently in a phase III registration studies – Mercury 1 and Mercury 2. Based on the success of the Mercury 1 and Mercury 2, the company plans to file a NDA for Roclatan too, by the end of 2017 or early 2018.
The company expects expenses in 2017 to be flat year over year with an increase of about $16 million of capital expenditures in 2017. The company expects clinical expenses to decline in 2017 as it winds down its U.S. based trials. However, the company expects increase in commercialization and scale-up expenses and growth of its medical affairs team along with the addition of sales and managed care leadership.
Aerie faces stiff competition from established branded and generic pharmaceutical companies, such as Novartis’ (NVS - Free Report) Simbrinza and Travtan, and Allergan’s Lumigan, as well as other smaller biotechnology and pharmaceutical companies.
What Our Model Indicates
Our proven model does not conclusively show an earnings beat for Aerie 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. However, 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 pegged at a loss of 74 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Aerie has a Zacks Rank #3, which increases the predictive power of ESP. However, 0.00% ESP makes surprise prediction difficult for the quarter.
Note that we caution against stocks with Zacks Ranks #4 or 5 (Sell-rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.
Aerie Pharmaceuticals, Inc. Price and EPS Surprise
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.
Gilead Sciences, Inc. (GILD - Free Report) has an Earnings ESP of +2.77% and a Zacks Rank #3. The company is scheduled to release results on May 2.
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What Awaits Aerie Pharmaceuticals (AERI) in Q1 Earnings?
Aerie Pharmaceuticals, Inc. is scheduled to report first-quarter 2017 results on May 2. Last quarter, the company missed expectations by 33.85%. In fact, Aerie’s performance over the last four quarters has been disappointing. The company reported a wider-than-expected loss in the four trailing quarters, with an average negative surprise of 23.59%.
Aerie’s share price has increased 11.8% year to date, while the Zacks classified Medical-Medical Services industry gained 2.3%.
Factors Influencing This Quarter
With no approved product in its portfolio, Aerie depends heavily on its late-stage candidates-Rhopressa and Roclatan. Hence, we expect investor focus on pipeline updates.
Moving ahead, in the second half of 2017, the company expects to submit regulatory application in the European Union (EU) for its leading candidate, Rhopressa, a once-daily formulation for lowering intraocular pressure (IOP) in patients suffering from open-angle glaucoma and ocular hypertension.
In fact, in Oct 2016 Aerie had withdrawn the new drug application (NDA) in the U.S. for Rhopressa as a third party manufacturing facility in Tampa, FL was not ready for pre-approval inspection. However, the company resubmitted the NDA for Rhopressa on Feb 28, after notification by its contract drug product manufacturer that the vendor’s Tampa, Florida facility is now ready for pre-approval inspection by the FDA. The company expects a twelve-month FDA review process from the date of resubmission and plans to launch it in the second quarter of 2018.
Apart from Rhopressa, Aerie is also evaluating Roclatan, a once-daily, quadruple-action fixed-dose combination of Rhopressa and Xalatan (latanoprost). Roclatan is currently in a phase III registration studies – Mercury 1 and Mercury 2. Based on the success of the Mercury 1 and Mercury 2, the company plans to file a NDA for Roclatan too, by the end of 2017 or early 2018.
The company expects expenses in 2017 to be flat year over year with an increase of about $16 million of capital expenditures in 2017. The company expects clinical expenses to decline in 2017 as it winds down its U.S. based trials. However, the company expects increase in commercialization and scale-up expenses and growth of its medical affairs team along with the addition of sales and managed care leadership.
Aerie faces stiff competition from established branded and generic pharmaceutical companies, such as Novartis’ (NVS - Free Report) Simbrinza and Travtan, and Allergan’s Lumigan, as well as other smaller biotechnology and pharmaceutical companies.
What Our Model Indicates
Our proven model does not conclusively show an earnings beat for Aerie 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. However, 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 pegged at a loss of 74 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Aerie has a Zacks Rank #3, which increases the predictive power of ESP. However, 0.00% ESP makes surprise prediction difficult for the quarter.
Note that we caution against stocks with Zacks Ranks #4 or 5 (Sell-rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.
Aerie Pharmaceuticals, Inc. Price and EPS Surprise
Aerie Pharmaceuticals, Inc. Price and EPS Surprise | Aerie Pharmaceuticals, Inc. Quote
Stocks to Consider
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.
Fibrogen Inc. (FGEN - Free Report) has an Earnings ESP of +23.81% and a Zacks Rank #3. The company is expected to release results on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.
Gilead Sciences, Inc. (GILD - Free Report) has an Earnings ESP of +2.77% and a Zacks Rank #3. The company is scheduled to release results on May 2.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>