Oncothyreon Earnings: An Early Look

Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Oncothyreon (NASDAQ: ONTY  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

Oncothyreon has dealt with plenty of disappointment in recent years, and another round of bad news sent shares plunging again this quarter. Let's take an early look at what's been happening with Oncothyreon over the past quarter and what we're likely to see in its quarterly report on Thursday.

Stats on Oncothyreon

Analyst EPS Estimate

($0.16)

Year-Ago EPS

($0.27)

Revenue Estimate

$0

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Will Oncothyreon heal itself this quarter?
Analysts don't see Oncothyreon becoming profitable anytime soon, although they reduced their full-year 2013 loss estimates by $0.13 per share. The stock has resumed its downward slide, falling 45% just since early December.

Unfortunately, the most important news for Oncothyreon during the quarter was bad news, as its lead Stimuvax drug candidate to treat non-small-cell lung cancer didn't produce the phase 3 clinical-trial results that the company had hoped. In late December, development partner Merck KGaA said that the trials it ran on Stimuvax failed to show statistically significant survival rates in the trial, and although the company didn't rule out further testing, the prospects for an approvable drug anytime soon went down substantially as a result.

Oncothyreon isn't solely reliant on Stimuvax, but its PX-866 kinase inhibitor is still in the middle of phase 2 trials. Because of its sparse pipeline, Oncothyreon could have to wait a long time to make much progress.

One good thing for Oncothyreon is that it has the cash on hand to help it wait through its development phase. With a cash burn rate of about $25 million per year, Oncothyreon should be able to reach to the end of 2015 or so before running out of cash. By then, it should be much clearer whether the company has much hope of successfully getting a drug approved.

In its report, watch for Oncothyreon to discuss what plans it and Merck KGaA have to continue studies on Stimuvax. If the drug has any future potential, then any positive signs could lift shares back up quickly. Without some good news, though, Oncothyreon may never rebound from its current low levels.

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