Merrimack Pharmaceuticals, Inc. MACK is slated to report its second-quarter 2015 results after the market closes on Aug 10.
Merrimack Pharma has a mixed track record with the company beating estimates in two of the last four trailing quarters. The company delivered a negative earnings surprise of 84.11% in the trailing four quarters. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Being a development-stage biopharmaceutical company, Merrimack Pharma has not generated product revenues so far. In such a scenario, investor focus should remain on pipeline updates.
Currently, Merrimack Pharma’s lead candidate, MM-398, is under review in the U.S. for the treatment of patients suffering from metastatic adenocarcinoma of the pancreas, who have been previously treated with Eli Lilly’s LLY Gemzar-based therapy. In Jun 2015, the company received priority status for its new drug application for MM-398 from the FDA. A response from the agency should be out Oct 24. The candidate already enjoys fast track status in the U.S. The candidate is under review in the EU in the same indication. The company is collaborating with Baxter International BAX for the development of MM-398.
The company is evaluating MM-398 in other indications as well – two phase I investigator-sponsored studies for glioma and pediatric solid tumors, respectively. It also intends to conduct two additional studies on MM-398 – for frontline pancreatic cancer and first-line HER2-negative gastric cancer. Both studies are slated for initiation in 2015.
Merrimack Pharma has a number of early- and mid-stage oncology candidates in its pipeline – MM-121, MM-302, MM-151 and MM-141. Updates on these candidates are expected on the company’s second-quarter call.
What Our Model Indicates
Our proven model does not conclusively show that Merrimack Pharma is likely to beat estimates 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) to likely beat expectations. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00% since the Most Accurate estimate is in line with the Zacks Consensus Estimate of a loss of 28 cents.
Zacks Rank: Merrimack Pharma’s carries a Zacks Rank #4 (Sell). The company’s Earnings ESP of 0.00%, when combined with a Zacks Rank #4, makes surprise prediction difficult.
A Stock That Warrants a Look
Here is a company you may want to consider as our model shows that it has the right combination of elements to post an earnings beat this quarter:
Inovio Pharmaceuticals, Inc. INO has an Earnings ESP of +275.00% and carries a Zacks Rank #3. The company is slated to release second-quarter results on Aug 10.
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