Partnership terminations, government investigations, pipeline updates, and advancements in new products mark this week’s earnings reports from Valeant Pharmaceuticals Intl Inc (NYSE:VRX), MannKind Corporation (NASDAQ:MNKD), Inovio Pharmaceuticals Inc (NASDAQ:INO), Oracle Corporation (NYSE:ORCL).
Valeant Pharmaceuticals Intl Inc
Valeant is set to release its Q4:15 earnings on Tuesday, March 15 before market open. The company was originally supposed to release earnings on February 29, though announced it would delay the earnings release and pulled 2016 revenue guidance upon the return of CEO Michael Pearson, who has been hospitalized with pneumonia since December. A week prior to original earnings, the company announced it was delaying the SEC filing of its annual report and planned on restating some of its 2014-2015 revenues and earnings to reflect unaccounted for Philidor sales; a partnership which ended in October. Following Pearson’s return, the company announced it is under investigation by the SEC due to its questionable relationship with Philidor, but could not provide more details at the time. News of the investigation triggered an 18% drop in shares.
For the fourth quarter, analysts are expecting revenues of $2.75 billion and earnings of $2.61 per share, compared to revenues of $2.28 billion and earnings of $2.58 per share for the same quarter of last year. In the fourth quarter, the company was mostly focused on damage control regarding its decision to terminate relations with specialty pharmacy Philidor amidst fraud allegations. Like several other pharma giants, the company was subject to a congressional probe regarding the surging prices of its heart medications. Accusations included purposefully limiting patient access to the drug and passing the high costs on to federal and state health care programs.
Following the cancellation of the earnings report and withdrawal of guidance, analyst Irina Rivkind Koffler of Mizuho weighed in on the stock, reiterating a Neutral rating and $112 price target on March 8, 2016. The analyst cited uncertainty regarding the Walgreens deal, allegations of questionable business practices, and CEO Pearson’s return. She also states that investors should “brace themselves for an entirely new story” upon the company’s earnings release.
According to TipRanks’ statistics, out of the 19 analysts who have rated the company in the past 3 months, 8 gave a Buy rating, 1 gave a Sell rating, and 8 remain neutral. The average 12-month price target for the stock is $123.71, marking a 78% upside from where shares last closed.
MannKind will release its Q4:2015 on Monday after market close. For the fourth quarter, analysts are expecting revenues of $70,000 and a loss of ($0.05) per share, compared to a loss of ($0.09) per share for the same quarter of last year.
For this quarter, all eyes will be on guidance as the company ended its license and collaboration agreement with Sanofi-Aventis for inhalable insulin drug Afrezza due to weaker than expected sales stemming from safety risks. Following this announcement, shares dropped 27%. Although the company can market and sell the drug alone, it needs a major partner by this summer for continued success.
Newly appointed CEO Matthew Pfeffer, replacing Alfred Mann who passed away in February, presented a series of steps to investors to increase sales following the Sanofi termination. These plans include lowering the price of Afrezza and exploring partnerships for the drug, increasing social media efforts, and partnering with a third party for specialized diabetes care centers. Following this presentation, analyst Joshua Schimmer of Piper Jaffray weighed in on the stock with and Underweight rating and $0.05 price target on February 3, 2016. Schimmer states, “We still see a flawed and desperate business strategy seemingly geared toward appealing to less sophisticated retail investors, and see no apparent way to generate adequate revenue to offset the spending requirements over the next 12 months for Afrezza.”
According to TipRanks’ statistics, out of the 4 analysts who have rated the company in the past 3 months, 1 is bullish and 3 are bearish. The average 12-month price target for the stock is $0.05, marking a 78% upside from where shares last closed.
Inovio Pharmaceuticals Inc
Inovio is set to release its Q4:15 earnings on Monday, March 14 before market open. Analysts are expecting the immunotherapy and vaccine company to post Q4 revenues of $6.96 million and a loss of ($0.20) per share, compared to revenues of $2.46 million ad a loss of ($0.12) for the same quarter of last year.
Because Inovio does not have any approved drugs in its portfolio, revenue stems from partnerships and collaborations with AstraZeneca and other companies. For this report, investors will be looking for pipeline updates from the company. The company is set to meet with the FDA and initiate a Phase 3 study on VGX-3011, currently in Phase 2 development to treat cervical dysplasia.
Other pipeline candidates include INO-3112, an immunotherapy targeting head, neck and cervical cancer resulting from the HPV virus, INO51-50, targeting prostate cancer, and INO-1400, targeting breast, lung and pancreatic cancer. Recently, the company’s vaccine for Zika virus, SynCon, displayed “robust and durable immune responses” in mice, causing the stock to rise 5%. The company plans to initiate Phase 1 testing on humans before year end.
According to TipRanks’ statistics, 3 analysts rated the company in the last 3 months, all with a Buy rating. The average 12-month price target for the stock is $20.67, marking a 200% upside from where shares last closed.
Oracle is set to release its Q3:16 earnings Tuesday, March 15 after market close. For this report, analysts are expecting the enterprise software company to post revenues of $9.13 billion and earnings of $0.62 per share, compared to revenues of $9.33 billion and earnings of $0.68 for the same quarter of last year.
Like other companies, Oracle has been moving to the cloud and providing remote services through data-centers rather than selling installed software. For the third quarter, investors will be looking for updates and adoption rates of the company’s cloud suites, as Oracle has made many advances in its cloud segment including introducing new services to hospitality and retail markets, as well as unveiling plans to construct a new tech campus in Austin, TX. The company also unveiled the Oracle PartnerNetwork Cloud program, a network of support and vertical market offerings.
Additionally, investors will be looking for how the company’s transition from licensing to cloud subscription will affect near-term top line growth, with revenues realized over a few years instead of immediately. Other factors weighing on the earnings report include the strengthening of the U.S. dollar, as much of Oracle’s revenue is generated abroad, as well as how the company measures up among competition from Google, IBM, and Amazon’s AWS.
Prior to earnings, analyst Sarah Hindlian of Macquarie initiated coverage on the stock with an Outperform rating and a $45 price target on March 3, 2016. She stated, “We believe Oracle represents an attractive and defensive investment for value investors. Oracle’s valuation is depressed relative to peer Microsoft, the company offers significant returns of cash to shareholders, and sentiment has become overly negative even as Oracle begins to approach several key events in the second half of FY’16 and beyond. These include: 1) lapping the free promotional period in its cloud applications business such that cloud revenues and margins are set to inflect higher; 2) EPS inflection from contraction to expansion; and 3) a delayed product cycle (Database 12cR2).”
According to TipRanks’ statistics, out of the 18 analysts who have rated the company in the past 3 months, 11 gave a Buy rating, 1 gave a Sell rating, and 6 remain on the sidelines. The average 12-month price target for the stock is $44.38, marking a 14% upside from where shares last closed.