GW Pharmaceuticals plc (GWPH) is set to report first-quarter fiscal 2015 results on Feb 4, before the market opens. Last quarter, the company posted a positive earnings surprise of 104.35%. Let’s see how things are shaping up for this announcement.

The company’s key growth driver, Sativex, approved outside the U.S. for the treatment of spasticity associated with multiple sclerosis, should continue to perform well in the first quarter of 2015. GW Pharma expects strong Sativex revenues driven by higher in-market sales.

The company expects a significant increase in cash burn in anticipation of the potential launch of Sativex in the U.S. and continued investments in the pipeline, particularly on Epidiolex.

Investor focus should remain on pipeline updates since a number of pipeline related activities are lined up for the rest of 2015.

Last month, the company reported top-line data from the first of three phase III studies on Sativex for the treatment of pain in patients suffering from advanced cancer who have experienced inadequate analgesia during optimized chronic opioid therapy. The drug failed to meet the primary endpoint in the study. However, the company plans to file a new drug application with the FDA provided results from two ongoing additional pivotal phase III studies on Sativex, are positive. Data from the studies are expected later in the year.

While GW Pharma has completed enrolling patients in part A of a phase II/III study on Epidiolex for the treatment of Dravet syndrome, enrollment into part B is expected to commence shortly. Data from phase III studies on Epidiolex is expected by the end of 2015. In addition to this, the company intends to initiate two pivotal phase III studies on Epidiolex for the treatment of Lennox-Gastaut syndrome shortly.

Earnings Whispers?

Our proven model does not conclusively show that GW Pharma is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.

Zacks ESP: The Earnings ESP for GW Pharma is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are at a loss of 91 cents per share.

Zacks Rank: GW Pharma carries a Zacks Rank #3 (Hold). GW Pharma’s Zacks Rank #3 when combined with an ESP of 0.00% makes surprise prediction difficult.

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

Stocks That Warrant a Look

Regeneron Pharmaceuticals, Inc. (REGN) has an Earnings ESP of +8.65% and a Zacks Rank #3. The company is scheduled to release results on Feb 10.

Actavis (ACT) has an Earnings ESP of +4.7% and it carries a Zacks Rank #3. The company is scheduled to release results on Feb 18.

The earnings ESP for Ariad Pharmaceuticals Inc. (ARIA) is +50.00% and it carries a Zacks Rank #3. The company is scheduled to release results on Feb 19.