What's in the Cards for GW Pharma (GWPH) in Q1 Earnings?

GW Pharmaceuticals plc. GWPH will report fiscal first-quarter 2018 results on Feb 5, before the market opens.

GW Pharma’s share price has increased 20.8% over a year compared with the industry’s gain of 26.7%.

 

 

Factors at Play

GW Pharma’s growth is solely dependent on Sativex, which is marketed outside the United States for the treatment of spasticity due to multiple sclerosis. The company in December 2017, terminated its agreement with Japan-based Otsuka Pharmaceutical for Sativex in the United States. As a result, GW Pharma reacquired full ownership of the development and commercialization rights of the product in the United States. The drug’s sales is expected to remain on a growth trajectory in fiscal first-quarter like the past several quarters, though the impact of the reacquisition will not be felt much this quarter.

GW Pharma made significant progress with its lead cannabinoid pipeline candidate, Epidiolex for the treatment of Lennox-Gastaut syndrome (“LGS”) and Dravet syndrome in Q4. In October 2017, the company submitted a new drug application for Epidiolex to the FDA seeking approval in both the indications. In December 2017, the FDA accepted the filing with Priority Review and set an action date of Jun 27, 2018. In December 2017, the company also submitted its marketing authorisation application (“MAA”) to the European Medicines Agency (“EMA”) for Epidiolex . It is also gearing up for the launch of the candidate, which is expected to increase operational expenses in fiscal first-quarter.

The company is also developing GWP42006 (CBDV) in a phase II clinical trial for epilepsy, with data expected to be announced soon. The candidate received orphan drug designation from the FDA for treating Rett syndrome.

Investor focus at the call will be on management’s comments commercialization plan for Epidiolex, if approved,e. An update on progress of CBDV development is also expected.

Surprise History

GW Pharma’s performance over the last four quarters has been rather poor, with the company surpassing the Zacks Consensus Estimate only once and missing the same on three other occasions. The average surprise over the last four quarters is -4.01%. The company missed estimates last quarter, resulting in a negative earnings surprise of 26.01%.

What Our Model Indicates

Our proven model shows does not conclusively show an earnings beat for GW Pharma 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 be able to beat estimates. But that is not the case here, as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate (loss of $2.39) and the Zacks Consensus Estimate (loss of $2.03), is -17.26%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: GW Pharma currently has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.

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

 

GW Pharmaceuticals PLC Price and EPS Surprise

 

GW Pharmaceuticals PLC Price and EPS Surprise | GW Pharmaceuticals PLC Quote

 

Stocks That Warrant a Look

Here are some biotech 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.

Alexion Pharmaceuticals, Inc. ALXN is scheduled to release fourth quarter results on Feb 8. The company has an Earnings ESP of +3.45% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Anthera Pharmaceuticals, Inc. ANTH is expected to release fourth quarter results on Feb 26. The company has an Earnings ESP of +20.47% and a Zacks Rank #2.

Exelixis, Inc. EXEL, which is expected to release fourth quarter results on Feb 26, has an Earnings ESP of +7.23% and a Zacks Rank #2.

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GW Pharmaceuticals PLC (GWPH) : Free Stock Analysis Report
 
Alexion Pharmaceuticals, Inc. (ALXN) : Free Stock Analysis Report
 
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Anthera Pharmaceuticals, Inc. (ANTH) : Free Stock Analysis Report
 
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