ACADIA Pharmaceuticals Inc. (ACAD - Free Report) is expected to report first-quarter 2017 results on May 4.
The company’s track record has been dismal. Evidently, ACADIA missed estimates in three of the trailing four quarters, bringing the average negative surprise to 13.67%. In the last reported quarter, ACADIA posted in line earnings.
ACADIA’s share price has increased 19.3% year to date compared with the Zacks classified Medical - Biomedical and Genetics industry’s gain of 4.9%.
Let’s see how things are shaping up for this announcement.
Factors at Play
In Apr 2016, the FDA approved ACADIA’s first drug, Nuplazid, for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis. In fact, the company made good progress with the commercial launch of this drug. Nuplazid became available for prescription in the U.S. on May 31, 2016.
This newly launched drug generated revenues of $12 million in the fourth quarter and $17.3 million for the full year 2016. The company expects sales to grow steadily in 2017 and thereafter The companywitnessed very good reimbursement and access for Nuplazid. In 2017, ACADIA also plans to expand its sales force from 133 to around 155 representatives in order to broaden and deepen awareness about the drug.
Meanwhile, the company is also on track with its multiyear plans of developing Nuplazid in indications beyond PD psychosis. It reported positive top-line results from its phase II exploratory study (-019 Study) of the drug in patients with Alzheimer’s disease (AD) psychosis in Dec 2016. Please note that, the FDA has not yet approved any drug to treat AD Psychosis.
Moreover, Nuplazid (primavanserin) has shown antipsychotic effects in clinical studies in three major central nervous system (CNS) disorders like Parkinson’s disease, schizophrenia and Alzheimer’s disease. In fact, the company had already added four new clinical programs for Nuplazid- Alzheimer's disease agitation, Schizophrenia inadequate response, Schizophrenia negative symptoms and major depressive disorders in the fourth quarter of 2016. Thus pursuing the total of six indications with primavanserin. Each one of these indications independently represents the potentials to impact the long-term growth of the company, thereby leading ACADIA to be a strong leader in the CNS space.
Our proven model does not conclusively show an earnings beat for ACADIA 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: ACADIA has an Earnings ESP of +13.70%. That is because the Most Accurate estimate is at a loss of 63 cents and the Zacks Consensus Estimate is pegged at a loss of 73 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ACADIA has a Zacks Rank #4 (Sell). Please note that we caution against stocks with Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some health care stocks that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter.
Ultragenyx Pharmaceutical Inc. (RARE - Free Report) has an Earnings ESP of +0.59% 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
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.
Editas Medicine, Inc. (EDIT - Free Report) has an Earnings ESP of +33.33% and a Zacks Rank #3. The company is expected to release results on May 15.
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