Zacks

The Zacks Analyst Blog Highlights: Valeant Pharmaceuticals International, Flexion Therapeutics, Ignyta and Anika Therapeutics

Zacks Equity Research
Updated

For Immediate Release

Chicago, IL – July 18, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Valeant Pharmaceuticals International, Inc. (NYSE: VRX – Free Report ), Flexion Therapeutics, Inc. (NASDAQ: FLXN – Free Report ), Ignyta, Inc. (NASDAQ: RXDX – Free Report ) and Anika Therapeutics, Inc. (NASDAQ: ANIK – Free Report ).

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Here are highlights from Monday’s Analyst Blog:

4 Sell-Ranked Drug Stocks to Avoid Ahead of Q2 Earnings

Earnings season for the biotech and pharma sector kicks off this week with industry bellwether Johnson & Johnson reporting second quarter results tomorrow before the market opens. Swiss pharma giant Novartis, which was in the news recently related to a favorable FDA advisory panel recommendation for its CAR-T cell therapy, will also be reporting second quarter results tomorrow.

As of Jul 14, 2017, about 30 S&P 500 members or 9.3% of the index’s total market capitalization have reported results. A look at our Earnings Preview article shows that total earnings for these companies are up 13.8% from the year-ago quarter while revenues are up 6%.

As far as the Medical sector is concerned, revenues are expected to increase 3.7% though earnings are expected to decline 1%. This is in contrast to the first quarter when earnings rose 5.6% on revenue growth of 5.7%.

While overall sentiment towards pharma and biotech stocks has improved significantly in 2017 with investors focusing more on fundamentals than on issues like drug pricing, it would make sense to avoid drug companies that are sell ranked stocks and do not look well-positioned ahead of 2Q earnings. We have zeroed in on 4 stocks that have a Sell rank -- Zacks Rank #4 (Sell) or #5 (Strong Sell) and have a negative Earnings ESP for the second quarter.

Valeant Pharmaceuticals International, Inc. (NYSE:VRX – Free Report ): Canada-based specialty pharma company, Valeant, has been in the headlines mainly due to the drug pricing controversy and its relationship with Philidor. The Zacks Rank #5 stock, which missed earnings expectations in two of the last four quarters and revenue expectations in the first quarter of 2017, has a negative earnings ESP of 9.38% for the second quarter of 2017. The company, which has been working on simplifying its operating model and reducing debt, will be reporting results on Aug 8. Earnings estimates for 2017 are down 0.5% over the last 30 days.

Flexion Therapeutics, Inc. (NASDAQ:FLXN – Free Report ): Burlington, MA-based Flexion is a specialty pharmaceutical company focused on the development and commercialization of novel, local therapies for the treatment of patients with musculoskeletal conditions, beginning with osteoarthritis. The Zacks Rank #4 stock, which missed loss estimates in two of the last four quarters, has a negative earnings ESP of 7.5% for the second quarter of 2017. Loss estimates for the June quarter and 2017 are up 1.3% and 0.6%, respectively, over the last 7 days. Flexion is expected to report second quarter results on Aug 2.

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