Innoviva (INVA) to Report Q2 Earnings: What's in the Cards?

At second-quarter 2020 earnings release, we expect investors to focus on Innoviva, Inc.’s INVA royalty revenues earned from a related party and the performance of the company’s portfolio of royalty assets.

Innoviva depicts a dismal earnings surprise history, lagging expectations in three of the trailing four quarters while beating the same once, the average miss being 5.46%. In the last reported quarter, the company delivered a positive surprise of 37.21%.

Shares of Innoviva have inched up 2.4% year to date compared with the industry’s rally of 11.2%.

Let’s see, how things are shaping up for the quarter to be reported.

Factors at Play

The company with a portfolio of royalties that include respiratory assets partnered with Glaxo GSK. It is entitled to receive royalties from Glaxo on the sales of Anoro, Relvar, Breo, Trelegy and Ellipta, which are all trademarks of the latter.

Total net royalty revenues are expected to have increased year over year in the June quarter, supported by higher global net sales of Relvar/Breo Ellipta, Anoro Ellipta and Trelegy Ellipta.

Last month, Innoviva completed the second tranche of the $35-million worth common stock and warrant investment in Entasis. Investors will be keen to get an update on the same during the upcoming conference call as this transaction is part of the company’s ongoing efforts to chase its capital allocation options that will maximize its shareholder value.

Notably, in the first quarter of 2020, management stated that the impact of the prevalent COVID-19 pandemic is uncertain on the global sales of its three collaboration products. We expect management to provide an update on the same during the investors’ call ahead.

Key Highlights

Innoviva appointed Pavel Raifeld as its new chief executive officer effective May 20, 2020.

Meanwhile, in April 2020, Innoviva entered into a securities purchase agreement with Entasis Therapeutics, pursuant to which it will buy around $35 million of Entasis common stock and warrant securities, subject to certain closing conditions.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Innoviva this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that is not the case here.

Earnings ESP: Innoviva has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 32 cents per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: Innoviva carries a Zacks Rank #3, which increases the predictive power of ESP. However, its 0.00% ESP makes surprise prediction difficult.

Innoviva, Inc. Price and EPS Surprise

Innoviva, Inc. Price and EPS Surprise

Innoviva, Inc. price-eps-surprise
| Innoviva, Inc. Quote

Stocks to Consider

Here are some biotech stocks with the right mix of elements to beat on earnings this time around:

Agenus Inc. AGEN has an Earnings ESP of +15.85% and a Zacks Rank #2, currently.You can see the complete list of today’s Zacks #1 Rank stocks here.

ACADIA Pharmaceuticals Inc. ACAD has an Earnings ESP of +8.12% and a Zacks Rank of 3 at present.

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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.

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