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Lineage Cell (LCTX) to Post Q1 Earnings: What's in the Cards?

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Lineage Cell Therapeutics, Inc. (LCTX - Free Report) is scheduled to report first-quarter 2020 results on May 7, after the market closes.

Lineage Cell’s performance over the last four quarters shows a mixed record with the company surpassing expectations thrice and missing the same once, the average positive surprise being 164.29%. In the last reported quarter, Lineage Cell reported a positive earnings surprise of 57.14%.

Shares of Lineage Cell have declined 3.4% so far this year against the industry’s increase of 1.7%.

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

Key Factors to Note

Lineage Cell is focused on developing novel cell therapies for unmet medical needs. The company’s portfolio is currently devoid of any approved product. As a result, it only generates revenues from royalties, licensing fees, research grants and the sale of research products.

In the last reported quarter, Lineage Cell witnessed an increase in sequential revenues on higher royalties and licensing fees, a trend that most likely continued in the to-be-reported quarter.

Lineage Cell is currently evaluating OpRegen, a retinal pigment epithelium cell replacement therapy, in a phase I/IIa study for the treatment of advanced dry age-related macular degeneration (AMD) with geographic atrophy.

Meanwhile, OPC1, an oligodendrocyte progenitor cell therapy, is being evaluated in a phase I/IIa study for acute spinal cord injuries.

Lineage Cell plans to meet the FDA authorities to discuss further clinical developments of both OpRegen and OPC1. Investors will be keen to get an update on the same during the upcoming earnings call.

The study and developmental activities pertaining to the candidates are likely to have escalated the operating expense in the to-be-reported quarter.

We remind investors that Lineage Cell acquired Asterias Biotherapeutics, Inc. in March 2019 as a result of which, two additional cell therapy product candidates, namely OPC1 and VAC2 along with other assets were added to its product portfolio.

Recent Development

In May 2020, Lineage Cell announced that it applied for grant funding from the California Institute for Regenerative Medicine to support the use of its allogeneic dendritic cell therapy, VAC, for developing a potential vaccine against SARS-CoV-2, the virus which causes COVID-19.

We expect management to provide a detailed update on the same during the first-quarter earnings call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Lineage Cell this season. The 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.

Earnings ESP: Lineage Cell has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 5 cents per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: Lineage Cell sports a Zacks Rank of 1.

Lineage Cell Therapeutics, Inc. Price and EPS Surprise

Stocks to Consider

Here are some drug/biotech stocks with the right combination of elements to beat on earnings this time around:

Nabriva Therapeutics AG (NBRV - Free Report) has an Earnings ESP of +0.92% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACADIA Pharmaceuticals Inc. (ACAD - Free Report) has an Earnings ESP of +6.88% and a Zacks Rank #3. The company is scheduled to release results on May 7.

Kala Pharmaceuticals, Inc. (KALA - Free Report) has an Earnings ESP of +21.88% and a Zacks Rank of 2. The company is scheduled to release results on May 7.

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