We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is a Beat in Store for Royalty Pharma (RPRX) in Q3 Earnings?
Read MoreHide Full Article
We expect Royalty Pharma PLC (RPRX - Free Report) to beat expectations when it reports third-quarter 2020 results on Nov 11. In the last reported quarter, the company delivered an earnings surprise of 19.67%.
Shares of Royalty Pharma have underperformed the industry so far this year. The stock has declined 25.3% compared with the industry’s decrease of 3.6%.
Factors to Note
Royalty Pharma has neither an approved drug in its portfolio nor a pipeline. The company earns revenues from royalties from sales of marketed drugs of several companies. These include several key drugs — Vertex’s (VRTX - Free Report) cystic fibrosis franchise, Biogen’s (BIIB - Free Report) multiple sclerosis drug, Tysabri, J&J/AbbVie’s blockbuster cancer drug Imbruvica, Gilead’s HIV franchise, Merck’s Januvia and Janumet, Pfizer’s Xtandi, Novartis’ Promacta and others.
Sales of some of these drugs like Imbruvica, Tysabri and Promacta showed strong growth during the third quarter while sales of others remained flat or declined. The impact on royalties remains to be seen when the company reports.
Moreover, approval to Epizyme’s Tazverik in June and Roche’s Evrysdi in August is likely to have brought additional revenues. The company has agreements to earn royalties on sales of these drugs.
Royalty Pharma has entered into multiple royalty acquisition agreement resulting in approximately $1.7 billion in announced transactions so far this year. Investors will likely focus on anticipated cashflow from these agreements as well as update on any new or potential royalty acquisition agreements.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Royalty Pharma this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (60 cents per share) and the Zacks Consensus Estimate (59 cents per share) is +1.70%.
Here is a biotech stock that you may also want to consider, as our model shows that it has the right combination of elements to post an earnings beat this season.
ADC Therapeutics SA (ADCT - Free Report) has an Earnings ESP of +15.58% and a Zacks Rank #2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
Is a Beat in Store for Royalty Pharma (RPRX) in Q3 Earnings?
We expect Royalty Pharma PLC (RPRX - Free Report) to beat expectations when it reports third-quarter 2020 results on Nov 11. In the last reported quarter, the company delivered an earnings surprise of 19.67%.
Shares of Royalty Pharma have underperformed the industry so far this year. The stock has declined 25.3% compared with the industry’s decrease of 3.6%.
Factors to Note
Royalty Pharma has neither an approved drug in its portfolio nor a pipeline. The company earns revenues from royalties from sales of marketed drugs of several companies. These include several key drugs — Vertex’s (VRTX - Free Report) cystic fibrosis franchise, Biogen’s (BIIB - Free Report) multiple sclerosis drug, Tysabri, J&J/AbbVie’s blockbuster cancer drug Imbruvica, Gilead’s HIV franchise, Merck’s Januvia and Janumet, Pfizer’s Xtandi, Novartis’ Promacta and others.
Sales of some of these drugs like Imbruvica, Tysabri and Promacta showed strong growth during the third quarter while sales of others remained flat or declined. The impact on royalties remains to be seen when the company reports.
Moreover, approval to Epizyme’s Tazverik in June and Roche’s Evrysdi in August is likely to have brought additional revenues. The company has agreements to earn royalties on sales of these drugs.
Royalty Pharma has entered into multiple royalty acquisition agreement resulting in approximately $1.7 billion in announced transactions so far this year. Investors will likely focus on anticipated cashflow from these agreements as well as update on any new or potential royalty acquisition agreements.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Royalty Pharma this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (60 cents per share) and the Zacks Consensus Estimate (59 cents per share) is +1.70%.
Zacks Rank: Royalty Pharma currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Royalty Pharma PLC Price and Consensus
Royalty Pharma PLC price-consensus-chart | Royalty Pharma PLC Quote
Another Stock to Consider
Here is a biotech stock that you may also want to consider, as our model shows that it has the right combination of elements to post an earnings beat this season.
ADC Therapeutics SA (ADCT - Free Report) has an Earnings ESP of +15.58% and a Zacks Rank #2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>