What Awaits Selecta Biosciences (SELB) This Earnings Season?

Selecta Biosciences SELB is set to report second-quarter 2020 results on Aug 6, before market open. In the last-reported quarter, the company delivered an earnings surprise of 22.22%.

Selecta Biosciences’ shares have risen 10.9% this year so far, outperforming the industry’s increase of 3.6%.

The company’searnings performance has been mixed. Its earnings beat expectations in two of the last four quarters and missed in the other two, with the negative surprise being 6.71%, on average.

Selecta Biosciences, Inc. Price and EPS Surprise

Selecta Biosciences, Inc. Price and EPS Surprise

Selecta Biosciences, Inc. price-eps-surprise | Selecta Biosciences, Inc. Quote

Factors to Note

In the absence of any marketed drugs, the focus will be on updates related to its lead pipeline candidate, SEL-212, which is a combination of Selecta’s tolerogenic ImmTOR immune tolerance platform and a therapeutic uricase enzyme, pegadricase, on the second-quarter call. The head-to-head phase II COMPARE study evaluating SEL-212 versus pegloticase to treat chronic refractory gout patients completed enrollment in December 2019. Top-line results from the study are expected in the third quarter. The phase III program is expected to be initiated later this year.  Investors will be keen to know if the ongoing COVID-19 pandemic had any material impact on the progress of the COMPARE study on SEL-212 and the timeline for initiating phase III study.

Research and development costs are expected to have increased year over year due to costs related to the COMPARE study and Selecta’s gene therapy program in collaboration with AskBio.

Selecta and AskBio have been jointly developing a broad portfolio of next-generation AAV gene therapies with the first program expected to enter the clinic this year. An update regarding the same is expected on the call.

Key Collaborations in the Quarter

In June, Selecta announced a strategic license agreement with Swedish Orphan Biovitrum AB (Sobi) to help advance development and commercialization of SEL-212. Per the deal, Sobi will take care of development, regulatory and commercial activities in all markets outside China while Selecta will run the phase III study on behalf of Sobi. The transaction became effective on Jul 28.

In the quarter, Selecta entered into a research and license option deal with Sarepta Therapeutics SRPT. The deal granted Sarepta an option to license the rights to use Selecta’s ImmTOR immune tolerance platform to make therapies for neuromuscular diseases like Duchene muscular dystrophy and certain limb-girdle muscular dystrophies.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Selecta Biosciences this time around. 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.

Earnings ESP: Its Earnings ESP is 0.00% as both the Zacks Consensus Estimate as well as the Most Accurate Estimate are pegged at 32 cents per share. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings ESP Filter.

Zacks Rank: Selecta Biosciences currently carries a Zacks Rank #2.

Stock to Consider

Here are some biotech stocks that have the right combination of elements to beat on earnings this time around:

AcelRx Pharmaceuticals, Inc. ACRX has an Earnings ESP of +40.74% and carries a Zacks Rank #3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Translate Bio, Inc. TBIO has an Earnings ESP of +5.26% and holds a Zacks Rank of 2.

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