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Biotech Earnings Preview: Vertex, Onyx, Dendreon, Medivation

BOSTON ( TheStreet) -- Investors get their first look at new cancer drug launches from Onyx Pharmaceuticals (ONXX) and Medivation (MDVN - Get Report) this week when each company reports third-quarter results. Vertex Pharmaceuticals (VRTX - Get Report), Dendreon (DNDN) and Incyte Pharmaceuticals (INCY - Get Report) round out a busy week for biotech earnings.

Here's what to expect:

Vertex Pharmaceuticals releases third-quarter earnings Monday evening with its stock price down 17% since earlier this month.

Update: Thanks to Hurricane Sandy closing equity markets Monday, let's assume safely that Vertex is postponing its earnings release. Back to the preview...

I've heard multiple explanations for Vertex's recent weakness, so feel free to mix and match: The "cystic fibrosis trade" is being sold now that VX-809/Kalydeco data have been presented; lingering dissatisfaction and questions surrounding said cystic fibrosis data; worries about the next slug of cystic fibrosis data due in the first half of next year; and finally, weakening prescription trends for the hepatitis C drug Incivek.

Absent a huge upside surprise, Vertex's third-quarter earnings aren't likely to make many headlines. The most important number will be Kalydeco sales, with current consensus pegged at $57 million. Comments about the cystic fibrosis drug's European launch in July and market penetration trends will be followed closely. Analysts have been lowering their Incivek sales forecasts due to weak prescription trends (and despite a price increase.) Current consensus is approximately $270 million. One Incivek question: Will Vertex maintain its current 2012 guidance for Incivek of $1.1 billion to $1.25 billion?

Overall, Vertex is expected to earn 20 cents per share on $376 million in total revenue.

Dendreon's recent earnings reports have been painful, stock-crushing affairs so the best thing to be said for Tuesday is that investor expectations are really low. Absent an announcement that Provenge is being pulled from the market, Dendreon should manage to avoid inflicting too much damage on itself.

At $3.85, Dendreon shares trade at a three-year low. In fact, Dendreon shares are cheaper today than they were when results from the Provenge phase III study were announced.

Provenge sales of $81 million are expected for the third quarter, flat with sales of $80 million in the June quarter. Key topics for the conference call will be an update on the ongoing (and expense lowering) restructuring plan and the impact that two new prostate cancer drugs -- Johnson & Johnson's (JNJ) Zytiga and Medivation's Xtandi -- are having on Provenge market share.
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SYM TRADE IT LAST %CHG
ONXX $0.00 0.00%
DNDN $0.06 -6.02%
INCY $104.28 0.00%
MDVN $105.33 0.00%
VRTX $135.00 0.00%

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