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Regeneron (REGN) Q3 Earnings: Will the Stock Surprise?
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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) is scheduled to release third-quarter 2016 results on Nov 4, before the opening bell. The company’s performance has been mixed so far. In the last four reported quarters, it has surpassed earnings estimates on two occasions and missed the same twice. Overall, the company has recorded an average negative earnings surprise of 2.04%.
Last quarter, Regeneron recorded a positive earnings surprise of 21.97%. Let’s see how things are shaping up for this quarter.
Factors Influencing This Quarter
Regeneron’s key growth driver, Eylea, should continue to perform well in the third quarter of 2016 and contribute meaningfully to the company’s top line. In the second quarter of 2016, the company continued to witness strong sales growth for the eye treatment in both the U.S. and ex-U.S. markets. U.S. sales of the drug surged 27% year over year and around 6% sequentially, primarily driven by market share gains.
We note that Regeneron has a global development and commercialization agreement with Bayer AG (BAYRY - Free Report) outside the U.S. for Eylea. Product revenues from ex-U.S. Eylea sales are recorded by Bayer.
Meanwhile, Regeneron’s life-cycle management plans for Eylea suffered a setback in late September. Results from the phase II study evaluating Eylea, in combination with rinucumab (an anti-PDGFR-beta antibody) for wet age-related macular degeneration, fell short of expectations. The combination was compared to Eylea monotherapy.
Apart from Eylea, investor focus will remain on the performance of the PCSK9 inhibitor, Praluent. Focus will be mainly on Praluent’s acceptance in the physician community, formulary scenario for the product and its performance in other territories where it is being launched. Sales are expected to pick up once positive outcomes data is available and added to the label.
In the third quarter, Regeneron was quite active on the deal-making front. Among the notable ones is a deal with Teva Pharmaceutical Industries Limited (TEVA - Free Report) for the development and commercialization of Regeneron’s experimental nerve growth factor antibody, fasinumab.
On the third-quarter earnings call, focus will be on the company’s performance, particularly Eylea and Praluent. Investors are also expected to await updates on the company’s pipeline especially when late last week, the FDA has issued a complete response letter for its rheumatoid arthritis candidate, sarilumab. Moreover, the FDA has placed a clinical hold on a phase IIb study evaluating fasinumab for the treatment of chronic low back pain last month.
Earnings Whispers
Our proven model does not conclusively show that Regeneron 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. 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 stand at $2.27. Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Zacks Rank: Regeneron currently carries a Zacks Rank #3, which when combined with an ESP of 0.00%, 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.
Here is a health care stock that you may want to consider instead, as our model shows that it has 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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Regeneron (REGN) Q3 Earnings: Will the Stock Surprise?
Regeneron Pharmaceuticals, Inc. (REGN - Free Report) is scheduled to release third-quarter 2016 results on Nov 4, before the opening bell. The company’s performance has been mixed so far. In the last four reported quarters, it has surpassed earnings estimates on two occasions and missed the same twice. Overall, the company has recorded an average negative earnings surprise of 2.04%.
Last quarter, Regeneron recorded a positive earnings surprise of 21.97%. Let’s see how things are shaping up for this quarter.
Factors Influencing This Quarter
Regeneron’s key growth driver, Eylea, should continue to perform well in the third quarter of 2016 and contribute meaningfully to the company’s top line. In the second quarter of 2016, the company continued to witness strong sales growth for the eye treatment in both the U.S. and ex-U.S. markets. U.S. sales of the drug surged 27% year over year and around 6% sequentially, primarily driven by market share gains.
We note that Regeneron has a global development and commercialization agreement with Bayer AG (BAYRY - Free Report) outside the U.S. for Eylea. Product revenues from ex-U.S. Eylea sales are recorded by Bayer.
Meanwhile, Regeneron’s life-cycle management plans for Eylea suffered a setback in late September. Results from the phase II study evaluating Eylea, in combination with rinucumab (an anti-PDGFR-beta antibody) for wet age-related macular degeneration, fell short of expectations. The combination was compared to Eylea monotherapy.
Apart from Eylea, investor focus will remain on the performance of the PCSK9 inhibitor, Praluent. Focus will be mainly on Praluent’s acceptance in the physician community, formulary scenario for the product and its performance in other territories where it is being launched. Sales are expected to pick up once positive outcomes data is available and added to the label.
In the third quarter, Regeneron was quite active on the deal-making front. Among the notable ones is a deal with Teva Pharmaceutical Industries Limited (TEVA - Free Report) for the development and commercialization of Regeneron’s experimental nerve growth factor antibody, fasinumab.
On the third-quarter earnings call, focus will be on the company’s performance, particularly Eylea and Praluent. Investors are also expected to await updates on the company’s pipeline especially when late last week, the FDA has issued a complete response letter for its rheumatoid arthritis candidate, sarilumab. Moreover, the FDA has placed a clinical hold on a phase IIb study evaluating fasinumab for the treatment of chronic low back pain last month.
Earnings Whispers
Our proven model does not conclusively show that Regeneron 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. 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 stand at $2.27. Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Zacks Rank: Regeneron currently carries a Zacks Rank #3, which when combined with an ESP of 0.00%, 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.
REGENERON PHARM Price and EPS Surprise
REGENERON PHARM Price and EPS Surprise | REGENERON PHARM Quote
A Stock That Warrants a Look
Here is a health care stock that you may want to consider instead, as our model shows that it has the right combination of elements to post an earnings beat this quarter.
Aerie Pharmaceuticals, Inc. is slated to release third-quarter results on Nov 2. The company has an Earnings ESP of +8.57% and a Zacks Rank #3. 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>>