What's In The Cards For Inovio (INO) This Earnings Season?
Zacks Investment Research | May 03, 2017 04:28AM ET
Inovio Pharmaceuticals, Inc. (NASDAQ:INO) is scheduled to report first-quarter 2017 results, after market closes. The company incurred a wider-than-expected loss in the last quarter.
In the last year, Inovio’s shares underperformed the Zacks classified Medical-Biomed/Genetics industry. The stock lost 9.4% during the period, while the industry recorded an increase of 5.4%.
Inovio’s earnings performance is a mixed bag. The company beat expectations in one of the last four quarters, posted in-line results in one and missed estimates in the other two quarters. The average positive earnings surprise for the last four quarters was 5.09%.
Last quarter, the company missed expectations with a negative earnings surprise of 24.14%. Let’s see how things are shaping up for this announcement.
Factors to Consider
Given that Inovio does not have any revenue-generating product in its portfolio yet, investor focus will remain on pipeline and regulatory updates.
VGX-3100 is the most advanced candidate in the company’s pipeline. In Oct 2016, Inovio suffered a setback with the FDA placing a clinical hold on its late-stage program for VGX-3100. The FDA requested additional data to support the shelf-life of the newly designed and manufactured disposable parts of the Cellectra 5PSP immunotherapy delivery device. Consequently, the initiation of the phase III program, which was expected to start in the fourth quarter of 2016, is now anticipated in the first half of 2017, pending resolution of the FDA’s requests.
In Feb 2017, Inovio Pharma announced that it has entered into a collaboration and license agreement with Chinese biomedical firm ApolloBio Corp. The agreement grants ApolloBio the exclusive right to develop and commercialize Inovio's VGX-3100 in Greater China.
Apart from VGX-3100, Inovio has several other candidates in its pipeline in early- to mid-stage development. Also, the company is working on the development of Ebola, Zika and Middle East respiratory syndrome virus vaccines.
Inovio has collaborations with several companies and institutes for the development of its pipeline candidates. With no approved product in its portfolio, Inovio depends largely on collaborations, grants and other payments for revenues as well as for the development of its pipeline candidates. Therefore, the top line of the company varies on a quarterly basis depending on the timing of receipt of collaboration revenues.
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Earnings Whispers
Our proven model does not conclusively show that Inovio is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 33 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter .
Zacks Rank: Inovio has a Zacks Rank #4 (Sell). As it is we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks That Warrant a Look
Here are some health care stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Conatus Pharmaceuticals Inc. (NASDAQ:CNAT) is scheduled to release results on May 4. The company has an Earnings ESP of +57.14% and a Zacks Rank #3. You can see .
ImmunoGen, Inc. (NASDAQ:IMGN) is scheduled to release results on May 5. The company has an Earnings ESP of +8.33% and a Zacks Rank #3.
FibroGen, Inc. (NASDAQ:FGEN) is scheduled to release results on May 8. The company has an Earnings ESP of +23.81% and a Zacks Rank #3.
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