GW Pharmaceuticals (GWPH) Q2 Earnings: What To Expect?
Zacks Investment Research | May 02, 2017 06:28AM ET
GW Pharmaceuticals plc (NASDAQ:GWPH) is expected to report second-quarter fiscal 2017 results on May 4.
The company has an impressive track record. In fact, in the four trailing quarters, GW Pharma surpassed estimates every time, with an average positive surprise of 44.07%.
In the last reported quarter, the company delivered a positive earnings surprise of 42.96%. Let's see how things are shaping up for this quarter.
Medical Products industry declined 10.5%.
Factors at Play
GW Pharma’s key growth driver is Sativex, which is marketed outside the U.S. for the treatment of spasticity due to multiple sclerosis. Sativex is expected to keep up the growth trend of the past several quarters.
With just one approved product in its portfolio, at the upcoming earnings release, investor focus will be on Epidiolex and other pipeline updates.
GW Pharma has made significant progress with its lead cannabinoid pipeline candidate, Epidiolex. In Mar 2017, the company announced that the drug was granted orphan drug designation by the European Medicines Agency (EMA) for the treatment of Lennox-Gastaut syndrome (LGS). The company held a positive CMC pre-NDA meeting and expects to submit a New Drug Application (NDA) for Epidiolex in both Dravet syndrome and LGS indications with the FDA by the end of the first half of 2017.
The company‘s second candidate, GWP42006, is currently in a phase II clinical trial for epilepsy, with data expected in mid-2017. The company will likely commence phase II development of GWP42006 in the field of Autism Spectrum Disorders (ASD) in the ongoing quarter.
Meanwhile, in the second quarter of 2017 GW Pharma announced positive top-line data from a phase Ib/IIa study on the combination of GWP42002 and GWP42003 for the treatment of recurrent glioblastoma multiforme.
Earnings Whispers
Our proven model does not conclusively show that GW Pharmaceuticals 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.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of $1.50. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter .
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Zacks Rank: Although GW Pharmaceuticals’ Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult this quarter.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are a couple of health care stocks that you might want to consider, as our model shows that these have the right combination of elements – a positive Zacks Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) – to post an earnings beat this quarter.
Proteostasis Therapeutics, Inc. (NASDAQ:PTI) is expected to release results on May 12. The company has an Earnings ESP of +5.17% and a Zacks Rank #2. You can see .
FibroGen, Inc (NASDAQ:FGEN) has an Earnings ESP of +23.81% and a Zacks Rank #3. The company is expected to release results on May 8.
Editas Medicine, Inc. (NASDAQ:EDIT) is expected to release results on May 15. The company has an Earnings ESP of +33.33% and a Zacks Rank #3.
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