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What's in Store for Epizyme (EPZM) This Earnings Season?

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Epizyme, Inc.  (EPZM - Free Report) is scheduled to report second-quarter 2018 results on Aug 2, before the market opens.

In the last reported quarter, the company delivered a positive earnings surprise of 9.26%. In fact, its track record has been solid with Epizyme surpassing expectations in each of the trailing four quarters, recording an average positive earnings surprise of 8.44%.

Epizyme’s shares have declined 1.9% year to date compared with the industry’s decline of 5.9%.

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

Factors Influencing This Quarter

Epizyme has made significant progress with its lead candidate, tazemetostat (an EZH2 inhibitor), for the treatment of multiple types of hematological malignancies and genetically defined solid tumors.

Epizyme is conducting a broad clinical development program for tazemetostat as both a monotherapy and a combination treatment in relapsed/refractory and first-line non-Hodgkin lymphoma (“NHL”).

Based on initial discussions with the FDA during the fourth quarter of 2017, the company believes that it has the opportunity to submit for accelerated approval for tazemetostat as a monotherapy in follicular lymphoma (FL). The company is assessing its timeline for submitting to the FDA a new drug application (NDA) for tazemetostat for FL.

Epizyme has identified a path to submit for accelerated approval of tazemetostat for the treatment of patients with epithelioid sarcoma after discussions with the FDA in 2017. The company expects to file its first NDA seeking accelerated approval of tazemetostat for epithelioid sarcoma in the fourth quarter of 2018.

The company is also exploring tazemetostat to increase the clinical activity of immuno-oncology therapies by combining an anti-PD 1 or PDL-1 agent. Under its collaboration with Roche (RHHBY - Free Report) , the company is evaluating tazemetostat, in combination with anti-PD-L1 cancer immunotherapy, Tecentriq, for the treatment of patients with relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”) to determine the recommended phase II dose and advance into the expansion portion of the study. The company also plans to commence a combination study of tazemetostat in FL.

During the second quarter of 2018, the company received a setback as the FDA issued a partial clinical hold on the new enrollment of U.S. patients in the company’s ongoing trials for tazemetostat. Following a safety report of a pediatric patient who developed a secondary lymphoma, the FDA issued a partial clinical hold affecting new enrollment of patients with genetically defined solid tumors and hematologic malignancies, while the company updated the informed consent, investigator’s brochure and study protocols. Epizyme plans to complete IND-enabling studies for EZM8266, its G9a inhibitor designed to treat patients with sickle cell disease (SCD), in 2018 and prepare for a Phase 1 study in early 2019.

We expect the investors to focus on the partial hold on tazemetostat along with other updates on the candidate’s studies.

What Does the Zacks Model Unveil?

Our proven model does not conclusively show an earnings beat for Epizyme in the to-be reported 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) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: Epizyme has an Earnings ESP of -5.95% as the Most Accurate Estimate is pegged at a loss of 56 cents and the Zacks Consensus Estimate is pegged at a loss of 53 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Epizyme currently has a Zacks Rank #2, which increases the predictive power of ESP. However, we need to have a positive Earnings ESP to be confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.

Epizyme, Inc. Price and EPS Surprise

Epizyme, Inc. Price and EPS Surprise | Epizyme, Inc. Quote

 

Stocks That Warrant a Look

Here are some drug/biotech stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Pacira Pharmaceuticals, Inc. (PCRX - Free Report) has an Earnings ESP of +42.86% and currently carries a Zacks Rank #2. The company is scheduled to release second-quarter report on Aug 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Endo International Plc. (ENDP - Free Report) has an Earnings ESP of +1.37% and currently carries a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug 8.

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