Prothena Corporation PRTA is expected to report first-quarter 2015 results on May 4.
Prothena’s track record has been pretty good. Last quarter, the company delivered a positive earnings surprise of 26.15%. The company has posted positive earnings surprises in three of the trailing four quarters with an average beat of 185.94%. Let’s see how things are shaping up for this announcement.
Factors at Play
The company’s top-line results in the first quarter 2015 are expected to reflect collaboration revenues related to Prothena’s agreement with Roche RHHBY. Prothena has received $45 million out of the potential $600 million in total milestones payments related to the collaboration.
In the U.S, Prothena has an option to co-promote PRX002 and the companies will share all profits and development and commercialization costs on a 30/70 basis (30% Prothena and 70% Roche). In ex-U.S. markets, Roche has the sole responsibility of developing and commercializing PRX002. It will pay up to double-digit royalties on net sales of the product (upon approval) to Prothena.
During the first quarter Prothena announced that PRX002 had met the primary endpoint in a phase I study on healthy volunteers for the treatment of Parkinson’s disease and other related synucleinopathies. PRX002 is being developed in another phase I multiple ascending-dose study for Parkinson’s disease with results expected in the first half of 2016.
Apart from PRX002, Prothena’s pipeline also has candidates like NEOD001 (AL amyloidosis and cardiac dysfunction, phase III) and PRX003 (psoriasis and other inflammatory diseases, phase I).
The company expects to incur a net loss of around $77 million to $83 million in 2015.
Prothena does not have any approved product in its portfolio. We expect investors focus to remain on the company’s pipeline updates.
Earnings Whispers?
Our proven model does not conclusively show that Prothena is likely to beat its bottom-line estimates this quarter. That is because a stock needs to have both a positive Earnings ESP 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 Prothena is 0.00% since the Most Accurate Estimate stands at a loss of 59 cents per share, in line with the Zacks Consensus Estimate.
Zacks Rank #2 (Buy): Prothena’s Zacks Rank #2 when combined with a 0.00% ESP makes surprise prediction difficult.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of to post an earnings beat this quarter.
Tetraphase Pharmaceuticals, Inc. TTPH has an Earnings ESP of +6.06% and carries a Zacks Rank #3 (Hold). It is expected to report results on May 11.
The Earnings ESP for Actavis ACT is +1.04% and it carries a Zacks Rank #2. The company is scheduled to release results on May 11.
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