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Sorrento (SRNE) to Report Q2 Earnings: What's in the Cards?

Sorrento Therapeutics, Inc. SRNE will provide financial and corporate updates when it releases second-quarter 2020 results. It is a commercial biopharma company focused on delivering innovative and clinically meaningful therapies to patients and their families to address unmet medical needs.

The company has a mixed track record. It beat earnings estimates in one of the trailing four quarters, missed in another and matched the same in the remaining two. The four-quarter negative earnings surprise was 6.88%, on average. In the last reported quarter, Sorrento came up with a negative earnings surprise of 30.00%.

Shares of the company have skyrocketed 128.9% in the year so far compared with the industry’s growth of 6.4%.

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

Factors at Play

The COVID-19 pandemic has created uncertainties in the expected timelines for the company, including possible delays in clinical trials and disruptions in the supply chain for raw materials used in the clinical trial work. Such delays could materially impact the company’s business in future periods. The company stated that the extent of the COVID-19 pandemic’s impact on its business, operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict. The impact of the pandemic is likely to be reflected in the second-quarter results.

In July, the company signed a deal to acquire SmartPharm Therapeutics, Inc., a gene-encoded therapeutics company developing non-viral DNA and RNA gene delivery platforms for COVID-19 and rare diseases. The combination of SmartPharm's Gene Mab gene-encoded in vivo expression system and Sorrento's SARS-CoV-2 (STI-1499) neutralizing antibodies may potentially provide longer-acting, single-injection protection against COVID-19. We expect the company to provide updates on the deal in the upcoming earnings release.

In July 2020, Sorrento received clearance from the FDA to initiate a phase II study on Abivertinib in patients with COVID-19 who have moderate-to-severe pulmonary symptoms. We expect the company to provide updates on the study in the second-quarter earnings call.

In June, Sorrento announced that an application for Emergency Use Authorization (EUA) is under review at the FDA for its COVI-TRACK in vitro diagnostic test kit for the independent detection of IgG and IgM antibodies in sera of patients exposed to the SARS-CoV-2 virus. We expect an update on this in the second quarter results.

What the Zacks Model Unveils

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

Earnings ESP: Sorrentohas an Earnings ESP of 0.00%, as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at a loss of 22 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks That Warrant a Look

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

bluebird bio Inc. BLUE has an Earnings ESP of +69.18% and a Zacks Rank #3. 

ACADIA Pharmaceuticals, Inc. ACAD has an Earnings ESP of +4.23% and a Zacks Rank of 3. The company is scheduled to release second-quarter 2020 results on Aug 5.

Alexion Pharmaceuticals Inc. ALXN has an Earnings ESP of +0.40% and a Zacks Rank #3.

 

Sorrento Therapeutics, Inc. Price and EPS Surprise

 

Sorrento Therapeutics, Inc. Price and EPS Surprise

Sorrento Therapeutics, Inc. price-eps-surprise | Sorrento Therapeutics, Inc. Quote

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