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ACADIA Pharma (ACAD): Will It Disappoint in Q3 Earnings?

ACADIA Pharmaceuticals Inc.ACAD is expected to report third-quarter 2016 results on Nov 3.

In the four trailing quarters, the company has missed estimates thrice, bringing the average negative earnings surprise to 15.72%.

ACADIA PHARMA Price and EPS Surprise

ACADIA PHARMA Price and EPS Surprise | ACADIA PHARMA Quote

Let's see how things are shaping up for this announcement.

Factors at Play

ACADIA is expected to benefit from the commercial launch of Nuplazid on May 31 used for the treatment of hallucinations and delusions following its FDA approval on Apr 29. The newly launched drug generated revenues of $0.1 million in the second quarter and sales are expected to pick up in the third quarter. The introduction of Nuplazid represents a major paradigm shift in the treatment of patients with PD psychosis, as it is the first and only FDA-approved treatment for hallucinations and delusions.

Meanwhile, the company is on track with its multiyear plans of developing Pimavanserin in indications beyond PD psychosis. The company has completed enrollment in a phase II exploratory study on Pimavanserin for the treatment of Alzheimer's disease psychosis. Top-line results from this study are expected to be announced by the end of 2016.

However, Nuplazid pricing may be a cause for concern as physician, patient and payor responses are still uncertain.

Earnings Whispers

Our proven model does not conclusively show that ACADIA is likely to beat estimates this quarter. This 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. However, that is not the case here as you will see below.

Zacks ESP : ACADIA has an Earnings ESP of -1.82%. That is because the Most Accurate estimate stands at a loss of 56 cents while the Zacks Consensus Estimate pegged at a loss of 55 cents.

Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.

Zacks Rank : ACADIA has a Zacks Rank #3 which increases the predictive power of ESP. However, its negative ESP makes surprise prediction difficult for the quarter.

Note that we caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are a few companies that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Ariad Pharmaceuticals Inc. ARIA is expected to report earnings on Nov 1.The company has an Earnings ESP of +5.26% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Allergan plc AGN has an Earnings ESP of +0.56% and a Zacks Rank #3. The company is scheduled to report third-quarter results on Nov 2.

Infinity Pharmaceuticals, Inc. INFI has an Earnings ESP of +5.81% and a Zacks Rank #1. The company is scheduled to report results on Nov 3.

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ALLERGAN PLC (AGN): Free Stock Analysis Report

ACADIA PHARMA (ACAD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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