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ARIAD (ARIA): Is a Beat in the Cards this Earnings Season?
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ARIAD Pharmaceuticals, Inc. is expected to report third-quarter 2016 results on Nov 1.
In the last reported quarter, the company recorded a positive earnings surprise of 670%. Overall, ARIAD has posted an average positive earnings surprise of 153.54% in the four trailing quarters. Let’s see how things are shaping up for third quarter.
Why a Likely Positive Surprise?
Our proven model shows that ARIAD 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, stands at +5.26%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks Rank: ARIAD carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), #2 and #3 (Hold) have a significantly higher chance of beating earnings. The Sell-rated stocks (Zacks Rank #4 or 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 ARIAD’s favorable Zacks Rank and positive ESP makes us reasonably confident of a positive earnings beat this season. Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Focus on Iclusig’s Performance
ARIAD’s revenues are primarily generated by sales of its sole marketed product, Iclusig. The company expects Iclusig product and royalty revenues of $170–$180 million in 2016. Sales should be driven by continued demand, new patient additions and launch in additional territories. Moreover, sequential growth in Iclusig sales should be driven by field team expansion, label expansion, increasing clinical experience and patient retention programs.
ARIAD’s divestment of its EU operations to Incyte Corporation (INCY - Free Report) and out-licensing of the drug’s rights in the region will allow the company to earn royalties on Iclusig sales in these regions.
In addition, the Japanese approval of Iclusig triggered a milestone payment of $10 million from Otsuka in the third quarter.
Apart from Iclusig’s performance, investor’s focus should also be on its late stage candidate, brigatinib. The company has completed the rolling submission of the New Drug Application (NDA) for brigatinib in the U.S. for the treatment of patients with metastatic ALK-positive (ALK+) non-small cell lung cancer (NSCLC) who are resistant or intolerant to Pfizer Inc.’s (PFE - Free Report) Xalkori (crizotinib). An approval would allow the company to launch the experimental cancer treatment in the U.S. in 2017.
Here is another health care stock that you may want to consider, as our model shows that it also have the right combination of elements to post an earnings beat this quarter.
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>>
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ARIAD (ARIA): Is a Beat in the Cards this Earnings Season?
ARIAD Pharmaceuticals, Inc. is expected to report third-quarter 2016 results on Nov 1.
In the last reported quarter, the company recorded a positive earnings surprise of 670%. Overall, ARIAD has posted an average positive earnings surprise of 153.54% in the four trailing quarters. Let’s see how things are shaping up for third quarter.
Why a Likely Positive Surprise?
Our proven model shows that ARIAD 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, stands at +5.26%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks Rank: ARIAD carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), #2 and #3 (Hold) have a significantly higher chance of beating earnings. The Sell-rated stocks (Zacks Rank #4 or 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 ARIAD’s favorable Zacks Rank and positive ESP makes us reasonably confident of a positive earnings beat this season. Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Focus on Iclusig’s Performance
ARIAD’s revenues are primarily generated by sales of its sole marketed product, Iclusig. The company expects Iclusig product and royalty revenues of $170–$180 million in 2016. Sales should be driven by continued demand, new patient additions and launch in additional territories. Moreover, sequential growth in Iclusig sales should be driven by field team expansion, label expansion, increasing clinical experience and patient retention programs.
ARIAD’s divestment of its EU operations to Incyte Corporation (INCY - Free Report) and out-licensing of the drug’s rights in the region will allow the company to earn royalties on Iclusig sales in these regions.
In addition, the Japanese approval of Iclusig triggered a milestone payment of $10 million from Otsuka in the third quarter.
Apart from Iclusig’s performance, investor’s focus should also be on its late stage candidate, brigatinib. The company has completed the rolling submission of the New Drug Application (NDA) for brigatinib in the U.S. for the treatment of patients with metastatic ALK-positive (ALK+) non-small cell lung cancer (NSCLC) who are resistant or intolerant to Pfizer Inc.’s (PFE - Free Report) Xalkori (crizotinib). An approval would allow the company to launch the experimental cancer treatment in the U.S. in 2017.
ARIAD PHARMA Price and EPS Surprise
ARIAD PHARMA Price and EPS Surprise | ARIAD PHARMA Quote
Stocks to Consider
Here is another health care stock that you may want to consider, as our model shows that it also have the right combination of elements to post an earnings beat this quarter.
Infinity Pharmaceuticals, Inc. is expected to report quarterly numbers on Nov 3. The company has an Earnings ESP of +5.81% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
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>>