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Is a Beat in Store for BioDelivery (BDSI) in Q2 Earnings?

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We expect BioDelivery Sciences International, Inc. (BDSI - Free Report) to beat estimates when it reports second-quarter 2018 results on Aug 9 after market close.

Shares of the company have declined 11.9% so far this year compared with the industry’s 4.9% decrease.

BioDelivery’s earnings performance has been a mixed bag over the trailing four quarters. While the company surpassed expectations in two of the last four quarters, it missed the same on the other two occasions, delivering an average negative surprise of 3.38%.

In the last reported quarter, the company outpaced the Zacks Consensus Estimate with a positive earnings surprise of 21.74%.

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

Factors at Play

Belbuca (chronic pain) and Bunavail (opioid-dependence) constitute BioDelivery’s marketed portfolio.

Belbuca’s start has also been slower-than-expected due to pain market pressure. We remind investors that BioDelivery had reacquired worldwide rights to Belbuca in January from Endo Pharmaceuticals. As a result of this reacquisition, the company started recording product revenues for Belbuca against royalties recorded previously.

Moreover, the company is focusing on improving managed care coverage for the drug and has also expanded its sales force. In March, the company was able to secure preferred coverage by Humana, the second largest Medicare insurer in the country.

In the past few quarters, following the re-acquisition, prescription volumes of the drug have improved. In the first quarter, the drug showed good growth with prescription volume touching an all-time high of 10,000 prescriptions. The company expects the positive trend to continue through the year.

Belbuca was launched in Canada in January, wherein it will be sold by Purdue Pharma. The anticipated strong growth and launch in geography are expected to boost sales.

Bunavail sales remained flat over the past couple of quarters and we expect this trend to continue.

The Zacks Consensus Estimate for product sales stands at $11.76 million.

Last month, BioDelivery Sciences announced the appointment of Herm Cukier as its new chief operating officer. Prior to his appointment, Cukier served as senior vice president at Allergan (AGN - Free Report) .

What Our Model Indicates

Our proven model shows that BioDelivery is likely to beat this earnings season because it has the right combination of the two key ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Zacks ESP: BioDelivery has an Earnings ESP of +8.60% as the Zacks Consensus Estimate is pegged at a loss of 19 cents per share, while the Most Accurate Estimate stands at a loss of 17 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: BioDelivery has a Zacks Rank #2. The combination of BioDelivery’s Zacks Rank #2 and positive ESP makes us confident of an earnings beat in the upcoming release..

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

A few health care stocks with the right combination of elements to beat estimates this time around are as follows:

Sarepta Therapeutics (SRPT - Free Report) has an Earnings ESP of +48.94% and a Zacks Rank of 3.  The company is scheduled to release second-quarter results on Aug 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

Horizon Pharma (HZNP - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug 8.

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