The second-quarter 2024 reporting cycle of the Medical sector will gain further traction this week. The sector mainly comprises pharma/biotech and medical device companies.

The earnings season for the sector kicked off earlier this month, when bellwether Johnson & Johnson reported strong second-quarter results, beating on both counts. Swiss pharma giant Novartis AG also reported better-than-expected quarterly results. Last week, biotech giant Bristol-Myers also beat on its sales and earnings.

Per the Earnings Trends report, as of Jul 24, 16.9% of the companies in the Medical sector — representing 33.8% of the sector’s market capitalization — reported quarterly earnings. Of these, 100% outperformed both earnings and revenue estimates. Earnings increased 4.2% year over year, while revenues grew 2.6%. Overall, second-quarter earnings of the Medical sector are expected to increase 19.4% year over year, while sales are likely to grow 7.3%.

Only a handful of biotech companies have reported so far and results are due for most bigwigs in the sector. While GSK plc (GSK Quick QuoteGSK - Free Report) is scheduled to report second-quarter results on Jul 31, before the opening bell, Vertex Pharmaceuticals (VRTX Quick QuoteVRTX - Free Report) , Biogen (BIIB Quick QuoteBIIB - Free Report) , Moderna (MRNA Quick QuoteMRNA - Free Report) and Regeneron Pharmaceuticals (REGN Quick QuoteREGN - Free Report) are slated to release the same on Aug 1.

Let’s see how these biotech companies are likely to have performed in the soon-to-be-reported quarter.

GSK plc

GSK has a decent track record, with estimates surpassing estimates in three of the trailing four quarters while missing the mark on one occasion. GSK delivered a four-quarter earnings surprise of 10.11%, on average. In the last reported quarter, the company delivered an earnings surprise of 15.96%.

Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

GSK has an Earnings ESP of +0.70% and a Zacks Rank #3, which indicates a probable beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GSK’s earnings per share is pegged at $1. Higher sales of newer products like Arexvy, Cabenuva, Juluca, Dovato, Trelegy Ellipta and Shingrix are likely to have offset the decline in sales of older HIV drugs and respiratory medicines due to generic erosion and competitive pressure.

Vertex Pharmaceuticals

Vertex’s performance has been impressive over the trailing four quarters. The company beat on earnings in each of the trailing four quarters, delivering an average surprise of 5.92%. In the last reported quarter, the company delivered an earnings surprise of 16.10%.

Vertex has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.  The Zacks Consensus Estimate for revenues is pegged at $2.65 billion, while the same for earnings is pinned at $4.04 per share.

Vertex Pharmaceuticals Incorporated Price and Consensus

Vertex Pharmaceuticals Incorporated price-consensus-chart | Vertex Pharmaceuticals Incorporated Quote

The company’s quarterly revenues are likely to have been driven by the robust uptake of its blockbuster cystic fibrosis drug, Trikafta/Kaftrio (Trikafta’s brand name in Europe). However, higher Trikafta/Kaftrio sales are likely to have caused sales erosion of Vertex’s other CF drugs. Investors can expect an update regarding the progress made with the launch activities for Casgevy on the upcoming earnings call.

Biogen

Biogen’s earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 3.91%.

Biogen currently has an Earnings ESP of -1.09% and a Zacks Rank #3. The Zacks Consensus Estimate for revenues is pegged at $2.38 billion, while the same for earnings is pinned at $4.00 per share.

Biogen’s sales in the second quarter are likely to have been hurt by lower sales of its multiple sclerosis (MS) drugs like Tecfidera and Tysabri amid rising competitive pressure in the MS market. Tecfidera sales are declining as multiple generic versions of the drug have been launched in the United States, Brazil and certain EU countries. Investors will also focus on the uptake of Leqembi sales.

Moderna

Moderna’s performance has been excellent, exceeding earnings estimates in each of the trailing four quarters. It delivered a trailing four-quarter earnings surprise of 55.39%, on average. In the last reported quarter, the company delivered an earnings surprise of 14.48%.

Moderna has an Earnings ESP of 0.00% and a Zacks Rank #2. The Zacks Consensus Estimate for sales is pegged at $124.9 million and the same for earnings is pinned at a loss of $3.47 per share.

During the second quarter, sales of COVID-19 vaccines are likely to have been minimal due to lower demand. Investors will also look for updates from Moderna on its launch plans for the RSV vaccine mResvia, which received FDA approval for use in adults aged 60 years and older in May. This approval was a milestone for the company as it marks the first product approval outside the COVID-19 vaccine space.

Regeneron Pharmaceuticals

Regeneron’s earnings beat estimates in three of the trailing four quarters and missed in the other one, delivering an average surprise of 4.47%. In the last reported quarter, REGN’s earnings fell short of estimates by 6.37%.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $3.38 billion, while the same for earnings is pinned at $10.55 per share.  REGN currently has an Earnings ESP of +0.59% and a Zacks Rank #3, which indicates a potential beat.

Higher profits from asthma drug Dupixent’s sales are likely to have driven growth and offset the decline in sales of the ophthalmology drug Eylea. Investors will focus on the uptake of a higher dose formulation of Eylea.

Regeneron Pharmaceuticals, Inc. Price and Consensus