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What's in the Cards for Prothena (PRTA) in Q3 Earnings?

Prothena Corporation plc PRTA is expected to report third-quarter 2017 results on Nov 7.

Last quarter, the company reported a narrower-than-expected loss resulting in a positive earnings surprise of 48.31%.  Notably, Prothena’s track record has been decent so far. The company reported a narrower-than-expected loss in two of the trailing four quarters, with an average positive surprise of 14.3%.

Prothena’s share price has increased 17.1% in the year so far, better than the industry’s gain of 5.4%.

Let's see how things are shaping up for this announcement.

Pipeline Progress in Focus

Prothena’s top line primarily comprises collaboration revenues earned through its license, development and commercialization agreements. In fact, the company earns collaboration revenues mainly under its license agreement with Roche Holding AG RHHBY for PRX002.

We expect, investors focus to remain on pipeline updates as it has no approved product in its portfolio.

The company is evaluating its lead candidate NEOD001 in the phase III VITAL Amyloidosis study in newly diagnosed treatment-naïve patients with AL amyloidosis and cardiac dysfunction.  Prothena is also evaluating the candidate in a phase IIb study, PRONTO, in previously treated patients with AL amyloidosis and persistent cardiac dysfunction. The company completed enrolment in this study and top-line results from the study are expected following the 12-month study period in second-quarter 2018.

Moreover, Prothena is evaluating PRX002, in collaboration with Roche, for the treatment of Parkinson’s disease and other related synucleinopathies. The company initiated a phase II study, PASADENA, in patients suffering from Parkinson`s disease in second-quarter 2017.The initiation triggered a $30 million milestone from Roche to Prothena.

Earlier in the month, Prothena announced disappointing results from a phase Ib multiple ascending dose (MAD) study of pipeline candidate, PRX003 in psoriasis patients. The primary objectives of the study were achieved. However, advancing PRX003 into mid-stage clinical development required a well-defined relationship between biological activity and meaningful clinical effects and these prerequisites were not met.

Prothena is also working to advance PRX004 in a phase I study in patients with ATTR amyloidosis. The candidate is expected to enter clinic in 2018.

Moving ahead, like any other development-stage biotechnology company, Prothena is likely to see an increase in research and development expenses due to higher spending on pipeline.

Prothena Corporation PLC Price and EPS Surprise


Prothena Corporation PLC Price and EPS Surprise | Prothena Corporation PLC Quote

Earnings Whispers

Our proven model doesn’t conclusively show that Prothena 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 be able to beat earnings. 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 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate is pegged at a loss of $1.40. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Prothena currently carries a Zacks Rank #3. Although the rank is favourable, the company’s 0.00% ESP makes surprise prediction difficult.

Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an 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 they have the right combination of elements to post an earnings beat this quarter.

Agenus Inc. AGEN has an Earnings ESP of +8.11% and a Zacks Rank #2. The company is scheduled to release third-quarter results on Nov 7. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACADIA Pharmaceuticals Inc. ACAD has an Earnings ESP of +3.2% and currently carries a Zacks Rank #3. The company is expected to release third-quarter results on Nov 6.

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Roche Holding AG (RHHBY): Free Stock Analysis Report
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