What's In The Cards For Ionis (IONS) This Earnings Season?

Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) is scheduled to report first-quarter 2017 results on May 9. Last quarter, the company recorded a positive earnings surprise of 265%. Let’s see how things are shaping up for this announcement.

Ionis’ share price has increased 0.4% year-to-date compared with the Zacks classified Medical-Drugs industry’s gain of 4.3%.

Factors to Consider

Ionis earns revenues in the form of upfront, milestone and other payments under its partnerships with leading health care companies like Biogen Inc. (NASDAQ:BIIB) and Glaxo. These agreements also validate the company’s technology platform.

In Dec 2016, Ionis and Biogen received FDA approval for Spinraza (nusinersen), an antisense drug, for the treatment of spinal muscular atrophy (SMA). In Feb 2017, Ionis received a $60 million milestone payment from Biogen in relation to the approval of Spinraza, which should boost sales for the first quarter. The company earned another $5 million as milestone payment from Biogen for advancing a new program for an undisclosed neurological disease target under its broad neurology strategic collaboration. Also, it earned $75 million from Bayer (DE:BAYGN) for Advancing IONIS-FXI Rx and IONIS-FXI-L Rx.

Spinraza is expected to be a revenue driver for Ionis in 2017. Biogen, at its first quarter conference call, said Spinraza brought revenues of $47.4 million (U.S. revenues $46 million) in the first quarter.

Apart from Spinraza, we expect investor focus to be on Ionis’ pipeline update at the first quarter conference call.

In Jan 2017, the company along with its subsidiary Akcea Therapeutics announced that the company has entered into an exclusive, worldwide collaboration agreement with Novartis for the development and commercialization of two novel treatments, AKCEA-APO(a)-L and AKCEA-APOCIII-L, with the potential to treat cardiovascular disease.

In Mar 2017, Ionis and Akcea announced positive results from a pivotal phase III study, Approach, evaluating its pipeline candidate volanesorsen for the treatment of patients with familial chylomicronemia syndrome (FCS). The company plans to file for marketing authorization for FCS in the U.S., Europe and Canada in 2017.

Surprise History

Ionis’ track record has been mixed so far. Over the four trailing quarters, the company posted an average positive earnings surprise of 62.20%, having beaten estimates in two quarters and missing the same twice.

Earnings Whispers

Our proven model does not conclusively show that Ionis is likely to beat estimates this quarter. This 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 surpass estimates. 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 -50.00%. This is because the Most Accurate estimate stands at loss of 6 cents per share and the Zacks Consensus Estimate is a loss of 4 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Though Ionis’ Zacks Rank #3 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.

Note that we caution you against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

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.

Scheduled to release results on May 9, Alliqua BioMedical, Inc. (NASDAQ:ALQA) has an Earnings ESP of +33.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cidara Therapeutics, Inc. (NASDAQ:CDTX) has an Earnings ESP of +1.14% and a Zacks Rank #3. The company is expected to release results on May 11.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>