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Assertio (ASRT) to Report Q4 Earnings: What's in Store?

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At fourth-quarter 2019 earnings conference, we expect investors to focus on Assertio Therapeutics, Inc.’s ASRT updates related to the sales performance of its key drugs and the recent cost-saving initiatives, which are expected to generate result in substantial annualized savings for 2020.

The company boasts an excellent earnings surprise history, surpassing expectations in each of the trailing four quarters, the average being 26.88%. In the last reported quarter, Assertio delivered a positive surprise of 4.35%.

Shares of Assertio have plunged 69.5% in the past year compared with the industry’s decline of 3.8%.

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

Factors to Watch

Assertio currently markets two FDA-approved products and its top line mainly comprises revenues recognized from the product sales and royalties.

The company’s two neurology products, namely Cambia and Zipsor, are persistently seeing a decline in sales. Cambia is a non-steroidal anti-inflammatory drug for the acute treatment of migraine attacks while Zipsor is approved for treating mild-to-moderate acute pain.

Sale of both drugs went gone down sequentially as well as year over year in the last reported quarter, a trend that most likely continued in the to-be-reported quarter. Cambia sales were down, primarily due to lower volume while Zipsor sales weakened due to an unfavorable payor mix.

Meanwhile, in the third quarter of 2019, Assertio announced an acceleration of cost-saving initiatives, which is expected to generate $15 million in savings at the start of 2020 and $20 million, annually. We expect management to provide a detailed update on the same during the upcoming conference call.

Key Developments

Last month, Assertio completed the sale of its product, Gralise (gabapentin), to Alvogen for a total value of $127.5 million. The consideration included $75 million in cash upon the deal’s closure and the balance in the form of a royalty on the first $70 million in Gralise net sales.

This apart, Assertio announced that it expects Neurology Franchise’s net sales for 2019 to be above the upper end of the company’s previous guided range of $102-$105 million.

Earlier this month, Assertio completed the sale of Nucynta to Collegium Pharmaceutical COLL for a total value of $375 million. Along with this, the company announced that it has fully cleared its senior secured debt obligations.

Investors will be keen to get an update on the same during the upcoming earnings call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Assertio this season. The right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But this is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Assertio has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at 14 cents per share.

Zacks Rank: Assertio carries a Zacks Rank #3, which increases the predictive power of ESP. However, the 0.00% ESP makes surprise prediction difficult.

ASSERTIO THERAPEUTICS, INC Price and EPS Surprise

Stocks That Warrant a Look

Here are a few healthcare stocks worth considering as our model shows that these have the right mix of elements to beat estimates this time around.

Vericel Corporation VCEL has an Earnings ESP of +11.29% and a Zacks Rank of 1. The company is scheduled to release earnings results on Feb 25.

Sage Therapeutics, Inc. SAGE has an Earnings ESP of +2.74% and a Zacks Rank of 3. The company is scheduled to release earnings results on Feb 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

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