What's in the Cards for AEterna (AEZS) This Earnings Season?

Investors’ focus will be on the progress of AEterna Zentaris Inc.’s AEZS Macrilen in Europe when the company reports first-quarter 2019 results.

The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed the same once with the average positive surprise being 273.38%.

Shares of AEterna have gained 23.1% so far this year against the industry‘s rise of 4%.

In the last reported quarter, AEterna delivered a negative earnings surprise of 63.16%.

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

Things to Watch Out For

AEterna is focused on expanding the reach of its sole marketed product, Macrilen, through licensing. Macrilen is the first and only FDA-approved oral test for the diagnosis of adult growth hormone deficiency (“AGHD”). AEterna earns royalties on the sales of the product, which is currently marketed by Novo Nordisk NVO in the United States and Canada.

In January, Macrilen was approved for a similar indication in Europe. The company may provide update on launch initiatives in Europe on its first-quarter earnings call. We note that the performance of Macrilen has not been encouraging since its launch in 2017 in the United States.

We note that in March, a process to review various strategic options available to put AEterna on growth path was initiated. A global investment bank specializing in life sciences, Torreya, is acting as financial advisor to the company. The company may also provide updates on the options available.

Operating expenses in the first quarter are likely to be lower due to decreased research and development activities as well as lower selling expenses due to out-licensing of commercialization of Macrilen.

Earnings Whispers

Our proven model does not conclusively show that AEterna 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 estimates. But that is not the case here, as you will see below.

Earnings ESP: AEterna’s Earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at earnings of 4 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although AEterna’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

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

AEterna Zentaris Inc. Price and Consensus