Endocyte, Inc. (ECYT) is set to report third-quarter 2014 results on Nov 5 after market close. Last quarter, the company had posted an earnings surprise of +372.73%. Let’s see how things are shaping up for this announcement.
Factors at Play
Being a clinical stage biotech company, Endocyte does not generate any product revenues. Hence, investor focus will remain on pipeline updates.
Although Endocyte focuses on pipeline development, it expects overall expenditure to reduce in the second half of the year by one-third year-over-year. This is due to reduced costs related to the phase IIb TARGET study on Endocyte’s lead candidate, vintafolide, which is in monitoring mode. Final overall survival data from the study is awaited.
Additionally, with the termination of the company’s collaboration agreement with Merck & Co. Inc. (MRK) for the development and commercialization of vintafolide, (effective Sep 15, 2014) Endocyte will receive reimbursements from Merck for both PROCEED and TARGET studies.
However, collaboration revenues should decline to $3 – 5 million this quarter.
Meanwhile, Endocyte is evaluating two other candidates – EC1169 and EC1456. Studies on both candidates are ongoing. An update on EC1169’s progress as well as an update on the target indication(s) for EC1456 could be out this quarter.
Earnings Whispers?
Our proven model does not conclusively show that Endocyte is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Endocyte is 0.00% since the Most Accurate Estimate is -$0.19, in line with the Zacks Consensus Estimate.
Zacks Rank #2 (Buy): Endocyte’s Zacks Rank #2 (Buy), when combined with a 0.00% ESP, makes surprise prediction difficult.
Other Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements, i.e., a positive Zacks Earnings ESP and a Zacks Rank #1, #2 or #3.
Hospira, Inc. (HSP) has an Earnings ESP of +5.66% and holds a Zacks Rank #3 (Hold). The company will report third-quarter results on Nov 6 before the market opens.
Actavis plc (ACT) has an Earnings ESP of +0.32% and holds a Zacks Rank #2. The company will report third-quarter results on Nov 5 before the market opens.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment