Healthcare Roundup – Sorrento jumps 4.5%, Gilead Sciences Q2 2020 Earnings Preview

Published on: July 30, 2020
Author: Amy Liu

Sorrento jumps 4.5% after licensing rapid COVID-19 test from Columbia

Sorrento Therapeutics (NASDAQ:SRNE) climbs 4.5% after signing a licensing pact with Columbia University for the rights to a rapid one-step diagnostic test that detects SARS-CoV-2 virus in as little as 30 minutes from a saliva sample.

The test developed by Columbia’s team, to be marketed by Sorrento under the COVI-TRACE name, holds all of the testing materials in a single tube and requires no specialized laboratory equipment, making it easily deployable for point-of-care, on-site, or potentially at-home testing.

Gilead Sciences Q2 2020 Earnings Preview

Gilead Sciences (NASDAQ:GILD) is scheduled to announce Q2 earnings results on Thursday, July 30th, after market close.

The consensus EPS Estimate is $1.45 (-20.3% Y/Y) and the consensus Revenue Estimate is $5.3B (-6.9% Y/Y).

Over the last 2 years, GILD has beaten EPS estimates 75% of the time and has beaten revenue estimates 75% of the time.

Analyst expects R&D expense of $1.09B vs. $1.1B in Q1.

Over the last 3 months, EPS estimates have seen 2 upward revisions and 21 downward. Revenue estimates have seen 3 upward revisions and 16 downward.

Recent earnings Analysis from our contributors:Gilead: 2 Upcoming Catalysts

Onconova (+14%) advancing late-stage study of rigosertib in MDS

Onconova Therapeutics (ONTX +14.2%) announces that the required number of survival events has been reached in its Phase 3 clinical trial, INSPIRE, evaluating rigosertib in myelodysplastic syndromes (MDS) patients who failed to respond to chemotherapy.

Topline data should be available by the end of September.

Rigosertib is a small molecule that inhibits cellular signaling by acting as a Ras protein mimetic. Ras is a family of proteins that is involved in transmitting signals within cells. When switched “on”, it activates other proteins that ultimately turn on genes involved in cell growth, differentiation and survival.

MDS are a group of blood cancers in which immature blood cells in the bone marrow fail to mature into healthy blood cells.

“Onconova has enjoyed a significant appreciation in share value, but investors should tread carefully into the readout of INSPIRE and consider how the conflicting data around Rigosertib’s MOA could potentially impact the overall value and potential of this drug,” George Crist wrote on Seeking Alpha earlier today.

Kodak valuation ahead of itself on generic drug-stoked rally – Barron’s Al Root

The U.S. government loan-stoked stampede into Eastman Kodak (KODK +345.0%), driving shares up over 13-fold in two days has, unsurprisingly, lifted its valuation far above the anticipated upside from making generic drug ingredients.

Writing at Barron’s, former Baird strategist Al Root says generic drug firms trade at ~1.5x sales, leveraging $1 in assets to generate 40 cents in revenue. Accordingly, Kodak could expect to generate $300M – 400M in sales from the $765M loan which could translate into $450M – 600M in market value.

Before yesterday, the company’s market cap was ~$115M (43.7M shares outstanding x Monday’s close at $2.62). Adding in Root’s numbers brings fair value then to $565M – $715M, or 55%-65% below the current market cap of $1.6B.

Kodak is up 33% from when it resumed trading on the NYSE in 2013. In that same period, the VanEck Vectors Biotech ETF is up nearly 104% and Tesla is up 685% and Amazon is up 862%. Compare Kodak to more stocks with advanced charting.

AbbVie’s atogepant successful in late-stage migraine study

AbbVie (ABBV +0.1%) announces positive results from a Phase 3 clinical trial, ADVANCE, evaluating atogepant, an orally available calcitonin gene-related peptide (CGRP) receptor antagonist, for the prevention of migraine.

The study met the primary endpoint demonstrating a statistically significant reduction in mean monthly migraine days compared to placebo for all doses across the 12-week treatment period.

No new safety signals were observed.

Marketing applications in the U.S. and other countries are next up.

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