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What's in the Cards for Sarepta (SRPT) This Earnings Season?
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Investors are likely to focus on the launch plan for Sarepta Therapeutics, Inc.’s (SRPT - Free Report) muscular dystrophy candidate, golodirsen, when it reports second-quarter 2019 results.
The company’s earnings beat estimates in two of the last four reported quarters and missed the same twice with the average negative surprise being 9.3%.
Shares of Sarepta have risen 36.9% so far this year compared with the industry‘s increase of 0.4%.
In the last reported quarter, Sarepta delivered a positive earnings surprise of 47.8%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Sarepta’s sole marketed drug, Exondys 51, is likely to drive its revenues higher in the second quarter of 2019. The drug has shown a strong uptrend since its launch in 2016 and is the only approved treatment for Duchenne muscular dystrophy (“DMD”) in the United States.
Apart from Exondys 51, the company is developing multiple pipeline candidates, which include exon-skipping and gene therapies, for treating DMD. The company is likely to provide an update on the progress of these candidates in clinical studies.
The most advanced pipeline candidate — golodirsen, an exon-skipping candidate — is under review in the United States. A decision is expected next month. The company may provide an update on its plans for the commercial launch of the candidate following a potential approval.
Gene Therapy
Sarepta is also focused on developing gene therapies for the treatment of central nervous system (“CNS”) disorders as well as DMD.
The company is evaluating several gene therapy candidates in early- to mid-stage studies for CNS disorders and muscular dystrophy. The most advanced gene therapy candidate, LYS-SAF302 is being evaluated in a phase II/III study as a treatment for mucopolysaccharidosis Type IIIA, a progressive CNS disorder.
In May, Sarepta expanded its gene therapy pipeline to six candidates by signing an agreement with the Research Institute at Nationwide Children’s Hospital.
With several clinical studies underway, we expect operating expenses to increase in the soon-to-be-reported quarter. Moreover, commercial initiatives to support golodirsen potential launch will also drive expenses higher. Meanwhile, higher demand for Exondys 51 is also driving royalty payments to BioMarin (BMRN - Free Report) . We expect to see the same trend in the to-be reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Sarepta is likely to beat estimates 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) to be able to beat estimates. But that is not the case here, as you will see below.
Earnings ESP: Sarepta’s Earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of $1.08. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Although Sarepta’s Zacks Rank #1 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some 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 in their upcoming releases.
Regeneron Pharmaceuticals (REGN - Free Report) has an Earnings ESP of +6.25% and a Zacks Rank #3. The company is scheduled to release second-quarter 2019 results on Aug 6.
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Image: Bigstock
What's in the Cards for Sarepta (SRPT) This Earnings Season?
Investors are likely to focus on the launch plan for Sarepta Therapeutics, Inc.’s (SRPT - Free Report) muscular dystrophy candidate, golodirsen, when it reports second-quarter 2019 results.
The company’s earnings beat estimates in two of the last four reported quarters and missed the same twice with the average negative surprise being 9.3%.
Shares of Sarepta have risen 36.9% so far this year compared with the industry‘s increase of 0.4%.
In the last reported quarter, Sarepta delivered a positive earnings surprise of 47.8%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Sarepta’s sole marketed drug, Exondys 51, is likely to drive its revenues higher in the second quarter of 2019. The drug has shown a strong uptrend since its launch in 2016 and is the only approved treatment for Duchenne muscular dystrophy (“DMD”) in the United States.
Apart from Exondys 51, the company is developing multiple pipeline candidates, which include exon-skipping and gene therapies, for treating DMD. The company is likely to provide an update on the progress of these candidates in clinical studies.
The most advanced pipeline candidate — golodirsen, an exon-skipping candidate — is under review in the United States. A decision is expected next month. The company may provide an update on its plans for the commercial launch of the candidate following a potential approval.
Gene Therapy
Sarepta is also focused on developing gene therapies for the treatment of central nervous system (“CNS”) disorders as well as DMD.
The company is evaluating several gene therapy candidates in early- to mid-stage studies for CNS disorders and muscular dystrophy. The most advanced gene therapy candidate, LYS-SAF302 is being evaluated in a phase II/III study as a treatment for mucopolysaccharidosis Type IIIA, a progressive CNS disorder.
In May, Sarepta expanded its gene therapy pipeline to six candidates by signing an agreement with the Research Institute at Nationwide Children’s Hospital.
With several clinical studies underway, we expect operating expenses to increase in the soon-to-be-reported quarter. Moreover, commercial initiatives to support golodirsen potential launch will also drive expenses higher. Meanwhile, higher demand for Exondys 51 is also driving royalty payments to BioMarin (BMRN - Free Report) . We expect to see the same trend in the to-be reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Sarepta is likely to beat estimates 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) to be able to beat estimates. But that is not the case here, as you will see below.
Earnings ESP: Sarepta’s Earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of $1.08. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Although Sarepta’s Zacks Rank #1 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Sarepta Therapeutics, Inc. Price and Consensus
Sarepta Therapeutics, Inc. price-consensus-chart | Sarepta Therapeutics, Inc. Quote
Stocks That Warrant a Look
Here are some 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 in their upcoming releases.
Gilead Sciences (GILD - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2. The company is scheduled to release second-quarter 2019 results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron Pharmaceuticals (REGN - Free Report) has an Earnings ESP of +6.25% and a Zacks Rank #3. The company is scheduled to release second-quarter 2019 results on Aug 6.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>