Trevena, Inc.

TRVN Details

Trevena, Inc. (NASDAQ: TRVN) is a biopharmaceutical firm specializing in developing and commercializing innovative therapies for patients suffering from central nervous system (CNS) illnesses. The US Food and Drug Administration (FDA) approved its lead medication, OLINVYK (oliceridine) injection, or OLINVYK, in August 2020.TRV027 is being developed to treat acute lung injury; The company's product pipelines include TRV250 for acute migraines; TRV734 is being developed for moderate-to-severe acute and chronic pain and opioid use disorders, and TRV045 is being developed for chronic pain and epilepsy.

Latest News:

• NDA for OLINVYK Injection: TRVN reported on January 27, 2022, that China's National Medical Products Administration (NMPA) had accepted the submission of a New Drug Application (NDA) for oliceridine injection. TRVN's partner, Jiangsu Nhwa Pharmaceutical, submitted the NDA after completing a Phase 3 bridging trial for OLINVYK (oliceridine) injection, a novel IV analgesic that has been approved by the US Food and Drug Administration (FDA) for use in adults for the management of acute pain severe enough to require an intravenous opioid analgesic and for whom alternative treatments are inadequate.

Q3FY21 Results:

• Beginning of Product Revenues: TRVN clocked total revenues (included product and license) of USD 0.18 million in Q3FY21 (ended September 30, 2021), from USD 3.0 million (license revenue) in Q3FY20. However, it didn't report any product revenue in Q3FY20.
• Growth in Net Losses: TRVN's net loss expanded to USD 13.77 million in Q3FY21 from USD 5.55 million reported in Q3FY20.
• Healthy Balance Sheet: As of September 30, 2021, the company had cash & cash equivalents of USD 78.65 million and total debt of USD 0.01 million.

Risks:

• Product Concentration Risk: TRVN's future depends heavily on the commercial success of OLINVYK, the company's only approved medication. The commercialization of OLINVYK is based on physician prescription and patient acceptance; if physicians refuse to prescribe or continue the treatment, the company's financial performance may suffer.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation:

TRVN's share price has fallen 56.77% in the past six months and is currently leaning towards the lower end of its 52-week range of USD 0.46 to USD 2.42. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 0.62. The company offers an enticing risk-reward at current prices.

Considering the correction in the stock price in the past six months, robust product pipeline, new drug application, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the closing price of USD 0.4798, down 4.00% as of February 18, 2022.

Three-Year Technical Price Chart (February 18, 2022).Source: REFINITIV, Analysis by Kalkine Group

Technical Summary Analysis

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.