ACADIA Pharmaceuticals Inc. ACAD is scheduled to release second-quarter 2020 results on Aug 5.

The company has a good track record, delivering an earnings beat in three of the trailing four quarters while missing in one. The four-quarter earnings surprise was 7.72%, on average. In the last reported quarter, ACADIA came up with a negative earnings surprise of 23.91%.

Shares of ACADIA have gained 3.6% in the year so far compared with the industry’s growth of 7.4%.

Let’s see how things are shaping up for the quarter to be reported.

Factors to Note

ACADIA’s sole marketed drug, Nuplazid (pimavanserin), is the first and the only FDA-approved treatment for hallucinations and delusions associated with Parkinson’s disease psychosis.

Prompted by the plaguing COVID-19, during the first quarter, ACADIA lowered its 2020 revenue guidance by approximately 5%. The company now expects total Nuplazid revenues in the range of $420-$450 million for the full year compared with the previous guidance of $440-$470 million..

Apart from the performance of Nuplazid, investors will also focus on pipeline progress during the quarter.

In June 2020, the company submitted a supplemental new drug application (sNDA) to the FDA to support a potential new indication for Nuplazid for the treatment of hallucinations and delusions associated with dementia-related psychosis (DRP).  We expect an update on the same in the second-quarter earnings call.

In July 2020, ACADIA announced top-line results from the phase III CLARITY study evaluating Nuplazid for the adjunctive treatment of major depressive disorder. The study did not achieve statistical significance on the primary endpoint. The company should provide updates on the study during the second-quarter call.

Research and development expenses are also likely to have increased in the second quarter due to the ongoing clinical programs on Nuplazid for the adjunctive treatment of major depressive disorder and DRP.

Why an Earnings Beat?

Our proven model predicts an earnings beat for ACADIA this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increase the chances of an earnings beat.

Earnings ESP: ACADIA has an Earnings ESP of +8.12%, as the Zacks Consensus Estimate is pegged at a loss of 45 cents and the Most Accurate Estimate at a loss of 41 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks That Warrant a Look

Here are some biotech stocks with the right mix of elements to beat on earnings this time around:

Alkermes Plc. ALKS has an Earnings ESP of +411.13% and a Zacks Rank #3. The company is scheduled to release second-quarter 2020 results on Jul 29.

bluebird bio Inc. BLUE has an Earnings ESP of +69.18% and a Zacks Rank #3. 

Alexion Pharmaceuticals Inc. ALXN has an Earnings ESP of +0.40% and a Zacks Rank #3.

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