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Palatin's (PTN) to Report Q4 Earnings: What's in the Cards?

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Palatin Technologies, Inc. (PTN - Free Report) will focus on the commercialization of Vyleesi in the fourth quarter of fiscal 2019.

Shares of the company have rallied 23.9% year to date against the industry’s decline of 3.0%.

In the last reported quarter, the company witnessed a negative earnings surprise of 50.00%. Moreover, Palatinsurpassed earnings estimates in one of the trailing four quarters, the average positive surprise being 37.50%.

Let’s see how things are shaping up prior to the upcoming results.

Factors Likely to Impact Q4 Results

In June 2019, the FDA granted marketing approval to AMAG Pharmaceuticals, Inc.'s new drug application (NDA) for Vyleesi  (bremelanotide injection), a melanocortin receptor agonist developed by Palatin, indicated for the treatment of premenopausal women with acquired, generalized hypoactive sexual desire disorder (HSDD). The FDA's approval of the NDA triggers a $60-million milestone payment to Palatin under its North American license agreement with AMAG. In the second quarter, we expect Palatin to provide commercialization updates on the drug.

The company should also provide updates on its pipeline candidates during the quarter.

Palatin’s new product development activities primarily focus on melanocortin receptor 1 (“MC1r”) agonists, with potential to treat a number of inflammatory and autoimmune diseases such as dry eye disease (also known as keratoconjunctivitis sicca), uveitis, diabetic retinopathy and inflammatory bowel disease.

The company has also designed and is developing potential NPR candidates that are selective for one or more different natriuretic peptide receptors (NPR), including natriuretic peptide receptor-A (“NPR-A”), natriuretic peptide receptor B (“NPR-B”) and natriuretic peptide receptor C (“NPR-C”).

PL-3994 is an NPR-A agonist, which has completed phase I clinical safety studies. It has potential in the treatment of several cardiovascular diseases, including genetic and orphan diseases resulting from a deficiency of endogenous active NPR-A. The company has ongoing academic collaborations with several institutions for PL-3994.

PL-5028, a dual NPR-A and NPR-C agonist, is in preclinical development for cardiovascular diseases to reduce cardiac hypertrophy and fibrosis. The company has ongoing academic collaborations with several institutions for PL-5028 and seeks to enter a development partnership for the same by the end of calendar year 2019.

What Does the Zacks Model Unveil?

Our proven model does not conclusively show an earnings beat for Palatin in the to-be-reported 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: Palatin has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 2 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #2, which increases the predictive power of ESP. However, we need to have a positive Earnings ESP to be confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement are best avoided.

 

Stocks That Warrant a Look

Here are some drug/biotech stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Acadia Pharmaceuticals Inc. (ACAD - Free Report) has an Earnings ESP of +0.49% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Celgene Corporation has an Earnings ESP of +0.27% and a Zacks Rank #3.

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