Regeneron Pharmaceuticals, Inc.REGN is scheduled to release fourth-quarter 2015 financial results before the opening bell on Feb 9, 2016.
The company has recorded a positive earnings surprise in two of the trailing four quarters with an average negative earnings surprise of 2.57%. Let's see how things are shaping up for this announcement.
Will Eylea Drive Growth?
Eye drug, Eylea, which was co-developed by Regeneron and the HealthCare unit of Bayer BAYRY , is the key growth driver at the company. Regeneron has rights to the entire U.S. sales of the drug, while the companies share profits equally from its sales in the ex-U.S. territories.
In the third quarter, U.S. sales of Eylea showed a sequentially improvement of 12.1%. The eye drug could improve further on the back of label expansion in the EU and the U.S. For 2015, the company expects Eylea's U.S. sales to grow 50-55% year over year.
Regeneron received a major boost when the company and its partner Sanofi's SNY PCSK9 inhibitor, Praluent, gained approval in the U.S. for the reduction of high LDL cholesterol in adults. The cholesterol management market represents huge commercial potential and Praluent is expected to generate blockbuster sales.
What Our Model Indicates
Our proven model does not conclusively show that Regeneron is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to likely post an earnings beat. That is not the case here, as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $3.13.
Zacks Rank: Regeneron currently carries a Zacks Rank #3. Although the company's Zacks Rank #3 enhances the predictive power of the ESP, its 0.00% ESP makes a surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
A Stock That Warrants a Look
Here is a health care stock that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter.
Cytokinetics, Incorporated CYTK has an Earnings ESP of +6.45% and a Zacks Rank #3. The company is scheduled to release results on Feb 16.
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SANOFI-AVENTIS (SNY): Free Stock Analysis Report
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REGENERON PHARM (REGN): Free Stock Analysis Report
CYTOKINETCS INC (CYTK): 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.
