Inovio Pharmaceuticals, Inc. INO is scheduled to report third-quarter 2015 results on Nov 9, before the opening bell. The company has recorded positive earnings surprises in one of the trailing four quarters with an average negative earnings surprise of 122.27%. Let’s see how things are shaping up for this announcement.
Factors at Play This Quarter
Inovio is focused on the development of synthetic vaccines for the treatment of cancer and infectious diseases.
With Inovio not having any approved product in its portfolio, investor focus remains on pipeline updates. VGX-3100, a SynCon immunotherapy, is the most advanced candidate in the company’s pipeline. VGX-3100 is being developed for pre-cancerous cervical dysplasia. Based on encouraging top-line phase II data, the company intends to complete an end-of-phase II meeting with the FDA in 2015 and begin dosing patients in a phase III study in early 2016.
Apart from VGX-3100, Inovio is working on the development of other candidates as well. The company is evaluating INO-3112 (a combination of VGX-3100 and its IL-12 immune activator) for HPV-caused cervical cancer, and head and neck cancer. Apart from these, the company is developing several early-stage candidates including INO-5150 (prostate cancer – phase I) and INO-1400 (breast, lung and pancreatic cancer – phase I).
During the fourth quarter of 2014, the company’s collaboration, option and license agreement with Roche RHHBY for the co-development of INO-5150 was terminated. Inovio will now be solely responsible for the development of the candidate and bear all related costs.
What Our Model Indicates
Our proven model does not conclusively show that Inovio 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) for this to happen. 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%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at a loss of 1 cent.
Zacks Rank: The company’s Zacks Rank #4 (Sell) along with its ESP of 0.00% makes surprise prediction difficult.
Stocks That Warrant a Look
Here are a few 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.
Merrimack Pharmaceuticals, Inc. MACK has an Earnings ESP of +2.44% and carries a Zacks Rank #3. The company is scheduled to release results on Nov 9.
Alnylam Pharmaceuticals, Inc. ALNY has an Earnings ESP of +2.13% and carries a Zacks Rank #3. The company is slated to release results on Nov 9.
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