Puma Biotechnology (PBYI) Q1 Earnings: Stock To Disappoint?

Puma Biotechnology, Inc. (NASDAQ:PBYI) is expected to report first-quarter 2017 results later this month. The company’s earnings track record is disappointing as it missed estimates in three of the trailing four quarters and met expectations in one. The company had an average negative surprise of 3.23% in the last four quarters.

Puma’s shares have outperformed the Zacks classified Medical-Biomedical and Genetics industry, year to date. Shares of the company gained 27.2% so far this year, while the industry recorded an increase of 5.5%.



In the last reported quarter, Puma posted a negative surprise of 0.99%. Let’s see how things are shaping up for this announcement.

Factors at Play

Being a development-stage company, Puma Biotech does not have any approved product in its portfolio. Thus, investor focus should remain on updates pertaining to the development of neratinib, its lead pipeline candidate.

The candidate is currently under review in both the U.S. and the EU for the extended adjuvant treatment of HER2-positive early-stage breast cancer in patients who have previously been treated with Herceptin-based adjuvant therapy.

Moreover, several phase II combination studies on neratinib for the treatment of breast cancer are currently underway.

In Apr 2017, Puma presented encouraging additional data from breast cancer studies at the San American Association for Cancer Research Annual (AACR) on neratinib. These include interim data from a phase II study in patients with HER2-positive early stage breast cancer who had completed trastuzumab-based adjuvant therapy; interim phase I/II data from the NSABP FB-10 trial of neratinib plus Kadcyla (T-DM1) in HER2-positive MBC; and phase II data from SUMMIT study in HER2-negative breast cancer patients with HER2 mutations.

Puma anticipates more data updates in the second quarter. These include additional data from the phase III study on neratinib in third-line HER2-positive metastatic breast cancer patients and data from a phase II study on neratinib in HER2-positive metastatic breast cancer patients with brain metastases.

Earnings Whispers

Our proven model does not conclusively show that Puma Biotech is likely to beat estimates 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) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is pegged at 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of $2.08. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Puma Biotech’s carries a Zacks Rank #4 (Sell). As it is that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks That Warrant a Look

Here are some health care stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Conatus Pharmaceuticals Inc. (NASDAQ:CNAT) is scheduled to release results on May 4. The company has an Earnings ESP of +57.14% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

ImmunoGen, Inc. (NASDAQ:IMGN) is scheduled to release results on May 5. The company has an Earnings ESP of +8.33% and a Zacks Rank #3.

FIBROGEN INC (NASDAQ:FGEN) is scheduled to release results on May 8. The company has an Earnings ESP of +23.81% and a Zacks Rank #3.

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