What's In The Cards For Puma (PBYI) This Earnings Season?

Puma Biotechnology, Inc. (NASDAQ:PBYI) is scheduled to report fourth-quarter 2017 results on Mar 1 after market close.

The company’s earnings track record has been impressive so far with an average positive surprise of 41.48% in the last four quarters.

Puma’s shares have significantly outperformed the industry in a year’s time. While the stock has skyrocketed 82.7%, the industry has recorded a decrease of 3.3%.

Last quarter, Puma delivered a positive surprise of 50.55%. Let’s see, how things are shaping up for this announcement.

Factors at Play

Puma Biotechnology’s only marketed product, Nerlynx (neratinib), was launched in the United States for the treatment of HER2-positive breast cancer in August 2017. Though the company generated nominal sales from the drug in the third quarter, it is expected to generate some encouraging revenues in the to-be-reported quarter, given the company’s aggressive commercialization efforts for the same.

Notably, last November, Puma entered into an exclusive licensing agreement with Specialised Therapeutics Asia, a Singapore-based biotechnology company to commercialize Nerlynx in Australia, New Zealand and Southeast Asia.

The drug is also under review in the EU for the same indication. However, this month, the company announced that the Committee for Medicinal Products for Human Use has adopted a negative opinion, recommending the refusal of the Marketing Authorization Application for Nerlynx in the EU. Puma plans to submit a request for re-examining the opinion by the regulatory agency soon.

Several additional studies on neratinib targeting different types of breast cancer patient populations and in earlier-line settings are underway. Also, several phase II combination trials evaluating Nerlynx for the treatment of breast cancer are on.

Apart from the HER2-positive breast cancer indication, the company believes that neratinib holds potential for treating several other cancers including NSCLC and other tumor types that over-express or have a mutation in HER2.

We expect an update on some of these studies on fourth-quarter conference call.

What Our Model Indicates

Our proven model does not conclusively show that Puma is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a bullish Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Zacks ESP: Puma has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of $1.98. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Puma has a Zacks Rank #3, which increases the predictive power of ESP. However, a company’s 0.00% Earnings ESP makes surprise prediction difficult.

We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some health care stocks with the right combination of elements to beat on earnings this time around:

Gemphire Therapeutics (NASDAQ:GEMP) is expected to report fourth-quarter 2017 earnings on Mar 21. The company has an Earnings ESP of +8.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Atara Biotherapeutics, Inc. (NASDAQ:ATRA) is expected to announce fourth-quarter results on Mar 8. The company has an Earnings ESP of +7.42% and a Zacks Rank #3.

Aptose Biosciences, Inc. (NASDAQ:APTO) is expected to release fourth-quarter financial numbers on Mar 27. The company has an Earnings ESP of +20.00% and is a Zacks #3 Ranked palyer.

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