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small-cap

Speculative Bet on This NASDAQ-Listed Pharmaceutical Stock – AGRX

Feb 16, 2022 | Team Kalkine
Speculative Bet on This NASDAQ-Listed Pharmaceutical Stock – AGRX

Agile Therapeutics, Inc.

AGRX Details

Agile Therapeutics, Inc. (NASDAQ: AGRX) is a women's healthcare company to meet unmet medical needs in women. The company's first product, the Twirla (levonorgestrel and Ethinyl estradiol) transdermal system, is non-daily prescription contraception. Twirla is based on Skinfusion, a revolutionary transdermal patch that allows the medication to be delivered via the skin.

Latest News:

  • New Government Guidelines: The Department of Labor (DOL), Health and Human Services (HHS), and Treasury announced new recommendations on January 12, 2022, that promotes women's access to US Food and Drug Administration (FDA) approved contraceptive products in the United States. In addition, the Health Resources and Services Administration (HRSA) amended the Women's Preventative Services Guidelines, which included contraception services, on January 11, 2022. AGRX supports recent suggestions aimed at removing barriers to contraception access for women.
  • Recent Collaboration: AGRX established a new partnership with Afaxys Pharma, LLC, a recognized leader in the public health system, on January 10, 2022, to promote the Twirla transdermal system. Twirla's access to the US family planning community and patients who rely on healthcare in this environment will be expanded due to this partnership.

9MFY21 Results:

  • Revenue generation started: AGRX just began commercial operations and generated USD 2.59 million in revenue in 9MFY21 (ended September 30, 2021).
  • Widened net losses: The company witnessed an increase in net losses to USD 51.54 million during 9MFY21 vs. USD 34.23 million during 9MFY20.
  • Balance Sheet highlights: As of September 30, 2021, the company has a cash balance of USD 14.74 million and total debt of USD 16.43 million.

Key Risks:

  • Product Concentration: AGRX presently has no commercially available goods other than Twirla. So far, product sales have only yielded a marginal profit. Excessive reliance on a single product may jeopardize the company's operations and profitability.
  • Reliance on Third-Party Manufacturers: Because AGRX lacks manufacturing capabilities, it will continue to rely on Corium, a third-party manufacturer, to launch Twirla and further develop its future product candidates. It may not have or be able to secure enough Twirla or other product candidates to meet its demand for commercialization or clinical trials, which might harm its operations and cash flow.

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:

AGRX's stock price has fallen 78.87% in the past nine months and is currently trading close to the lower-band of the 52-week range of USD 0.28 to USD 3.77. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 0.41. Considering the significant correction in the stock price in the past nine months, its revenue-generating capabilities, recent partnership agreements, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 0.336, up 8.42% as of February 15, 2022, 2:42 PM ET.