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What's in the Cards for Inovio (INO) This Earnings Season?

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Inovio Pharmaceuticals, Inc. (INO - Free Report) is scheduled to report second-quarter 2018 results on Aug 7 after the market closes.

The company’s earnings history has been a mixed bag so far, having missed expectations on two occasions and surpassing the same in the other two quarters with an average negative surprise of 15.87%. Last reported quarter, the company missed the Zacks Consensus Estimate with a negative surprise of 33.33%.

Shares of Inovio have lost 4.6% so far this year, narrower than the industry’s decline of 4.9%.

Let’s see, how things are shaping up for the upcoming release.

Factors at Play

With no approved product in Inovio’s portfolio at the moment, the company is yet to generate product sales. The company’s top line varies on a quarterly basis, depending on the timing of receipt of collaboration revenues.

On second-quarter conference call, investor focus will be on the company’s progress with respect to its lead candidate, VGX-3100, which is being developed for treating HPV-16/18-related high-grade cervical dysplasia (CIN 2/3).

Inovio announced a partnership with the AIDS Malignancy Consortium to evaluate VGX-3100 for treating HPV-associated precancerous conditions in patients, who have tested positive for HIV. AMC will fund the phase II study to evaluate the efficacy of VGX-3100 in patients with human papillomavirus (HPV)-related high-grade anal dysplasia or squamous intraepithelial lesions (ASIL) and HIV.

VGX-3100 is the most advanced candidate in the company’s pipeline. Inovio is conducting a pivotal phase III REVEAL program to evaluate the safety and efficacy of VGX-3100 for the treatment of cervical dysplasia caused by human papillomavirus (HPV). Another phase II study is examining the efficacy of VGX-3100 in women with HPV-related vulvar neoplasia.

During the quarter to be reported, Inovio initiated a phase II trial to evaluate the efficacy of VGX-3100 in adult men and women afflicted with human papilloma virus (HPV)-related anal dysplasia. This will be the third indication that VGX-3100 is being evaluated for.

Apart from VGX-3100, Inovio has several candidates in its pipeline in early-to-mid-stage development.

Notably, INO-4700 is being co-developed by Inovio and GeneOne Life Science Inc for MERS (Middle East Respiratory Syndrome). In collaboration with GeneOne Life Science, Inovio plans to begin a phase I/II program during the third quarter of 2018.

In the quarter under review, Inovio began a phase I/II analysis to evaluate the safety, immunogenicity and preliminary efficacy of INO-5401 in combination with Regeneron’s cemiplimab on participants with newly-diagnosed glioblastoma (GBM).

Inovio announced that it has dosed its first patient as part of its phase I/II immuno-oncology trial in patients with newly diagnosed GBM.

Earnings Whispers

Our proven model does not conclusively show that Inovio is likely to beat on earnings this reporting season. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Inovio has an Earnings ESP of 0.00% because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 35 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Inovio carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

We caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some biotech stocks that you may want to consider as per our model, these have the right combination of elements to beat estimates this time around.

AC Immune SA (ACIU - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #2.  The company is expected to release second-quarter results on Aug 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

BioDelivery Sciences International, Inc. has an Earnings ESP of +8.60% and a Zacks Rank of 2. The company is scheduled to release second-quarter results on Aug 9 after the market closes.

Denali Therapeutics Inc. (DNLI - Free Report) has an Earnings ESP of +15.79% and a Zacks Rank of 3. The company is expected to release second-quarter results on Aug 10.

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