Biogen Idec (BIIB), a strong player in the multiple sclerosis (MS) market, will be reporting fourth quarter and full year 2014 results on Jan 29, after the market closes.
Biogen’s performance has been mixed in the first nine months of 2014 with the company beating expectations in the last two quarters and missing in the first quarter. The average earnings surprise over the last four quarters is +10.56%.
Will Tecfidera Sales be Impacted by PML Case?
Key focus this quarter will be on the impact of the confirmation of a case of progressive multifocal leukoencephalopathy (PML) in a patient on Tecfidera, the company’s oral MS treatment. PML (a rare, serious progressive neurologic disease which is often fatal) is a dreaded word where MS treatments are concerned and Biogen already has a history with PML with one of its MS drugs, Tysabri.
Tysabri was withdrawn from the market in 2005 following confirmed cases of PML. However, it was back on the market in 2006 with stricter monitoring plans and went on to bring in significant revenues.
Tecfidera scrips are not expected to be significantly impacted by the PML case. With one case being reported out of more than 100,000 patients, patients may be willing to overlook safety concerns given Tecfidera’s impressive efficacy.
Investor focus will remain primarily on the company’s guidance for 2015 as well as management’s comments regarding the impact of the PML case.
What Our Model Indicates
Our proven model does not conclusively show that Biogen is likely to beat the Zacks Consensus Estimate in the fourth quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for increasing the odds of an earnings surprise. Unfortunately, this is not the case as elaborated below.
Zacks ESP: The Earnings ESP for Biogen is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are $3.74 per share.
Zacks Rank: BIIB’s Zacks Rank #3 increases the predictive power of ESP. But we also need to have a positive ESP to be confident of an earnings surprise call.
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.
AbbVie (ABBV) has an Earnings ESP of +1.18% and carries a Zacks Rank #2 (Buy). It is scheduled to report results on Jan 30.
Acorda Therapeutics, Inc. (ACOR) has an Earnings ESP of +200% and a Zacks Rank #3. The company is scheduled to release results on Feb 12.
The Earnings ESP for Actavis (ACT) is +4.7% and it carries a Zacks Rank #3. The company is scheduled to release results on Feb 18.
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
Be the first to comment