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What to Expect from Epizyme (EPZM) This Earnings Season?

Epizyme, Inc. EPZM is scheduled to report second-quarter 2017 results on Aug 4, before the opening bell.

Last quarter, the company came up with a positive earnings surprise of 11.11%. In fact, its track record has been strong, with Epizyme surpassing expectations in each of the trailing four quarters, recording an average positive surprise of 11.09%.

Notably, Epizyme’s share price has declined 7.4% year to date against the Zacks classified industry’s gain of 9.8%.

Let’s see how things are shaping up for this quarter.

Factors Influencing This Quarter

Epizyme is a development-stage company with no approved products in its portfolio. Its top line comprise revenues earned through collaborations. Hence, investor focus is expected to remain on the company’s pipeline updates.

Currently, the company’s lead candidate, tazemetostat (an EZH2 inhibitor), is being evaluated for relapsed or refractory non-Hodgkin's lymphoma (NHL) and advanced solid tumors.

In fact, Epizyme is evaluating tazemetostat in a phase II study in adults with relapsed or refractory NHL, a phase II study in adults with certain genetically defined solid tumor (INI1-negative tumors, SMARCA4-negative tumors or synovial sarcomas). In Jun 2017, the company announced positive interim data from this study.

Also, it intends to meet with the FDA, in the second half of 2017 and discuss the NHL program, with the goal of defining its registration pathways in various subtypes.

Furthermore, the company is exploring tazemetostat to increase the clinical activity of immuno-oncology therapies by combining it with an anti-PD 1 or PDL-1 agent. Notably, under its collaboration with Roche Holding AG RHHBY, Epizyme is evaluating tazemetostat in combination with anti-PD-L1 cancer immunotherapy, Tecentriq, for the treatment of patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) to determine the recommended phase II dose and advance into the expansion portion of the study.

The company’s other experimental candidate, pinometostat, an inhibitor of the DOT1L HMT is currently in a phase I study for the treatment of children with MLL gene (MLL-r).

As of Mar 31, Epizyme expects that its cash balance of $211.2 million will be used to fund its planned operations through at least the third quarter of 2018.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Epizyme this quarter. This is because a stock needs to have both a positive http://www.zacks.com/earnings/earnings-surprise-predictions/">Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately that is not the case here, as you will see below.

Zacks ESP: Epizyme has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 56 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Epizyme has a Zacks Rank #2. This when combined with 0.00% ESP makes surprise prediction difficult.

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

Epizyme, Inc. Price and EPS Surprise

Epizyme, Inc. Price and EPS Surprise | Epizyme, Inc. Quote

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.

Tesaro, Inc. TSRO has an Earnings ESP of +16.40% and a Zacks Rank #3.  The company is expected to release results on Aug 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

Esperion Therapeutics, Inc. ESPR has an Earnings ESP of +17.37% and a Zacks Rank #3. The company is scheduled to release results on Aug 3.

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Roche Holding AG (RHHBY): Free Stock Analysis Report
 
Epizyme, Inc. (EPZM): Free Stock Analysis Report
 
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Esperion Therapeutics, Inc. (ESPR): Free Stock Analysis Report
 
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