Back to top

What's in Store for Adverum (ADVM) This Earnings Season?

Read MoreHide Full Article

Adverum Biotechnologies, Inc. (ADVM - Free Report) is expected to report second-quarter 2018 results on Aug 14.

The company has a mixed track record with missed estimates in two of the last four quarters while it surpassed expectations on other two occasions with an average beat of 5.70%. Last reported quarter, Adverum lagged estimates with a negative surprise of 3.45%.

However, shares of Adverum have rallied 34.3% year to date versus the industry’s decrease of 5.3%.

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

Factors to Consider

With no approved product in Adverum’s portfolio at the moment, the company is yet to generate revenues. Hence, we expect investor focus to remain on pipeline updates on second-quarter earnings call.

The company’s robust pipeline consists of early-stage gene therapy programs for rare diseases, namely alpha 1 antitrypsin (A1AT) deficiency, wet age-related macular degeneration (wAMD) and hereditary angioedema (HAE).

We expect management to discuss the pipeline development plans in detail on second-quarter conference call.

Adverum has been progressing well with its pipeline candidate ADVM-043 for the treatment of A1AT deficiency. The company expects to report preliminary data from a phase I/II study (ADVANCE) on the candidate during the second half of 2018.

Adverum’s gene therapy candidate, ADVM-022, is being developed for the treatment of wet AMD. In May, the company announced long-term preclinical efficacy data on ADVM-022 on non-human primate models of wAMD.

Adverum plans to submit investigational new drug applications for ADVM-053 (hereditary angioedema) and for ADVM-022 to the FDA in the second half of 2018.

Adverum extended its collaboration agreement with Editas Medicine in January 2018. Both companies will develop a therapy for up to five inherited retinal diseases using the latter’s CRISPR-based genome editing technologies.

The company has also collaborated with Regeneron Pharmaceuticals (REGN - Free Report) to develop eight distinct ocular therapeutic targets including AVA-311, which is being developed for treating juvenile X-Linked Retinoschisis.

Earnings Whispers

Our proven model does not conclusively show that Adverum is likely to beat estimates this to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a solid 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

Earnings ESP: Adverum has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 31 cents each. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Adverum currently carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. Moreover, the company’s 0.00% ESP makes surprise prediction difficult.

We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some biotech stocks that you may want to consider as per our model,  these have the right combination of elements to beat on earnings this earnings season.

Dicerna Pharmaceuticals, Inc. (DRNA - Free Report) is expected to release second-quarter results on Aug 9. The company has an Earnings ESP of +30.95% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aduro Biotech, Inc. (ADRO - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank of 3. The company is expected to release second-quarter results on Aug 1.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

More from Zacks Analyst Blog

You May Like