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Radius Health (RDUS) Q4 Earnings: Will the Stock Disappoint?

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Radius Health, Inc. (RDUS - Free Report) is scheduled to report fourth-quarter 2016 financial results on Feb 23.

Radius’ shares have underperformed the Medical Drugs industry in the last three months. The stock lost 14.7% during this time period as compared to a gain of 4.4% for the industry.

Radius Health has a disappointing track record so far. The company has missed estimates in three of the four trailing quarters with a negative average surprise of 6.58%.

Let’s see how things are shaping up for this quarter.

Factors at Play

Radius Health focuses on the development of therapeutics for the treatment of osteoporosis, oncology and endocrine diseases. However, being a development-stage company with no approved products in its portfolio yet, Radius Health does not generate any revenues from product sales.

In this scenario, investors are expected to focus on the company’s pipeline updates, during the upcoming earnings call.

The company’s lead candidate, abaloparatide subcutaneous (abaloparatide-SC), is being developed for reducing the risk of fractures in post-menopausal osteoporosis. The candidate is under review in both the U.S. and EU. The FDA has assigned a Prescription Drug User Fee Act (PDUFA) action date of Mar 30.

The Marketing Authorisation Application MAA is under review by the European Medicines Agency (EMA). An opinion from the Committee for Medicinal Products for Human Use (CHMP) is expected in 2017 as well.

Meanwhile the company has been looking for a partner to commercialize abaloparatide. It is also developing the abaloparatide-transdermal (abaloparatide-TD) patch for treating osteoporosis.

Other candidates in Radius Health’s pipeline include RAD1901 (in hormone-driven and/or hormone-resistant breast cancer, and vasomotor symptoms in post-menopausal women) and RAD140 (multiple indications including cancer). During the third-quarter 2016, the company completed enrollment in the phase Ib expansion cohort for RAD1901 in ER+, HER2-negative advanced breast cancer with 20 patients obtaining the 400 mg dose.

The company observed multiple confirmed clinical responses among heavily pre-treated patients. Meanwhile, Radius Health continues to enroll patients in the European phase I FES-PET trial — the first three-patient dosing cohort at 400 mg has been enrolled and they have achieved a reduction equal to or greater than 75% in FES-PET signal intensity.

Research and development expenses are expected to record an upside thanks to pipeline development activities.

Earnings Whispers

Our proven model does not conclusively show that Radius Health is likely to beat estimates this quarter. That 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. But that is not the case here, as you will see below.

Zacks ESP: Earnings ESP for Radius Health is currently pegged at 0.00%. This is because, both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of $1.13. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Radius Health has a Zacks Rank #4 (Sell). As it is, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Radius Health, Inc. Price and EPS Surprise


Radius Health, Inc. Price and EPS Surprise | Radius Health, Inc. Quote


Stocks to Consider

Here are a few pharma companies that you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.

Pacira Pharmaceuticals, Inc. (PCRX - Free Report) is expected to release results on Mar 1. The company has an Earnings ESP of +20% and a Zacks Rank #2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Exelixis, Inc. (EXEL - Free Report) is +200% and it carries a Zacks Rank #2. The company is slated to release results on Feb 27.

Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) has an Earnings ESP of +30.43% and carries a Zacks Rank #3. The company is slated to release results on Feb 21.

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