Watch These 5 Drug Stocks for Q1 Earnings: Beat or Miss?

The earnings season for the drug/biotech sector is now in its final lap, with two S&P 500 companies, Viatris VTRS and Perrigo Company PRGO, and some other drug/generic companies due to report their first-quarter 2024 results this week.

The majority of the large drugmakers have already reported their results. Many of these companies beat estimates for both earnings and sales. Some companies also raised their guidance for 2024, mainly the earnings per share outlook.

Per the Zacks classification, the pharma/biotech industry comes under the broader Medical sector, which comprises pharma/biotech as well as medical device companies.

As of May 1, per the Earnings Trends report, 55% of the companies in the Medical sector — representing 78.0% of the sector’s market capitalization — reported quarterly earnings. Of these, 93.9% of participants beat estimates for earnings and 75.8% beat for revenues. While earnings declined 31.2% year over year, revenues rose 4.4% over the year-ago period.

Overall, first-quarter earnings of the Medical sector are expected to decline 25.1%, while sales are expected to rise 7.1% year over year.

Here we discuss five drug/generic companies, Viatris, Perrigo, Teva Pharmaceutical TEVA, Iovance Biotherapeutics IOVA and ACADIA Pharmaceuticals ACAD, which are set to report first-quarter 2024 results this week.

Viatris

This large generic drugmaker’s performance has been mixed, with the company beating earnings expectations in three of the last four quarters while missing in one. Viatris delivered a four-quarter positive earnings surprise of 3.78%, on average. In the last reported quarter, the company delivered a negative earnings surprise of 8.96%.

Viatris Inc. Price and EPS Surprise

Viatris Inc. Price and EPS Surprise

Viatris Inc. price-eps-surprise | Viatris Inc. Quote

Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Viatris has an Earnings ESP of +0.74% and a Zacks Rank #3, indicating a likely positive surprise. The Zacks Consensus Estimate is pegged at earnings of 68 cents per share while revenue estimate is $3.74 billion. Viatris will report on May 9.

Revenues in the Viatris Generic segment are likely to have improved in the first quarter of 2024 after declining in the previous quarter. New products like Breyna (generic of Symbicort), among others, should have enabled the company to offset the slowdown in mature products.  Viatris’ key brands like Yupelri and Effexor are likely to have pushed up sales of its Brands segment.

Perrigo Company

Perrigo provides over-the-counter health and wellness solutions. Perrigo’s surprise history has been mixed, with the company beating earnings expectations in three of the last four quarters while missing in one, delivering an average beat of 6.47%. In the last reported quarter, Perrigo delivered an earnings beat of 3.61%.

Perrigo Company plc Price and EPS Surprise

Perrigo Company plc Price and EPS Surprise

Perrigo Company plc price-eps-surprise | Perrigo Company plc Quote

Perrigo has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for earnings is pegged at 24 cents per share while revenue estimate is $1.09 billion. Perrigo will report on May 7.

Perrigo reports its results under the Consumer Self Care Americas (CSCA) and Consumer Self Care International (CSCI). While sales in the CSCA segment are likely to have been hurt by lower net product sales in the United States, those in the CSCI segment are expected to have been aided by products added through its HRA Pharma acquisition made in 2022.

Teva Pharmaceutical

Teva’s surprise history has been mixed so far, with its earnings beating estimates in two of the trailing four quarters, matching estimates in one and missing expectations in the other. It has a trailing four-quarter negative earnings surprise of 1.80%, on average. In the last reported quarter, Teva’s earnings beat estimates by 33.33%.

Teva Pharmaceutical Industries Ltd. Price and EPS Surprise

Teva Pharmaceutical Industries Ltd. Price and EPS Surprise

Teva Pharmaceutical Industries Ltd. price-eps-surprise | Teva Pharmaceutical Industries Ltd. Quote

Teva has an Earnings ESP of -4.46% and a Zacks Rank #3. The Zacks Consensus Estimate for earnings per share stands at 51 cents while revenue estimate is $3.7 billion. Teva will report on May 8.

Teva’s revenue growth in the fourth quarter is expected to have been driven by higher sales of Austedo, partially offset by lower sales of certain legacy brands like Copaxone. Increased competition is expected to have hurt generic products’ sales in the United States.

Iovance Biotherapeutics

Iovance Biotherapeutics has a mixed track record, with its earnings beating estimates in two of the last four quarters, matching estimates in one and missing the same in one, delivering an average beat of 20.05%. In the last reported quarter, Iovance Biotherapeutics’ earnings missed estimates by 2.27%.

Iovance Biotherapeutics, Inc. Price and EPS Surprise

Iovance Biotherapeutics, Inc. Price and EPS Surprise

Iovance Biotherapeutics, Inc. price-eps-surprise | Iovance Biotherapeutics, Inc. Quote

Iovance Biotherapeutics has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate stands at a loss of 45 cents per share while revenue estimate is $2.9 million. Iovance Biotherapeutics will report results on May 9.

On the first-quarter conference call, investors will seek an update on the progress of the commercial launch of Iovance’s new advanced melanoma drug Amtagvi, which was approved by the FDA in February this year. The sales contribution of Iovance’s other marketed cancer drug, Proleukin, is not likely to be meaningful. Iovance acquired worldwide rights to Proleukin from U.K.-based Clinigen Limited in May last year.

ACADIA Pharmaceuticals

ACADIA Pharmaceuticals’ surprise history has been mixed, with earnings beating estimates in two quarters and missing the same in the other two quarters. The trailing four-quarter average earnings surprise is 18.56%. In the last reported quarter, ACADIA Pharmaceuticals’ earnings missed estimates by 12.50%.

ACADIA Pharmaceuticals Inc. Price and EPS Surprise

ACADIA Pharmaceuticals Inc. Price and EPS Surprise

ACADIA Pharmaceuticals Inc. price-eps-surprise | ACADIA Pharmaceuticals Inc. Quote

ACADIA Pharmaceuticals has an Earnings ESP of -71.34% and a Zacks Rank #3. The Zacks Consensus Estimate for earnings stands at 17 cents per share while revenue estimate is $206.9 million. ACADIA will report on May 8.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Teva Pharmaceutical Industries Ltd. (TEVA) : Free Stock Analysis Report

Perrigo Company plc (PRGO) : Free Stock Analysis Report

ACADIA Pharmaceuticals Inc. (ACAD) : Free Stock Analysis Report

Iovance Biotherapeutics, Inc. (IOVA) : Free Stock Analysis Report

Viatris Inc. (VTRS) : 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.

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