Trevena, Inc.

TRVN Details

Trevena, Inc. (NASDAQ: TRVN) is a biopharmaceutical organization dedicated to creating and marketing new medicines for individuals with Central Nervous System (CNS) illnesses. It presently offers only one FDA-approved medication, OLINVYK (oliceridine) injection, used for treating people with severe acute pain who require an intravenous opioid analgesic but have failed to respond to other treatments. Other products in its pipeline are TRV250 for treating migraine, TRV734 for opioid use disorder, TRV045 for epilepsy, and TRV027 for acute respiratory distress syndrome and abnormal blood clotting in COVID-19 patients.

Latest News:

• Progressing Towards Treatment of DNP: On December 13, 2021, TRVN announced that it is progressing TRV045, S1P1 receptor modulator that it is developing as a possible treatment for diabetic neuropathic pain (DNP), into clinical development after receiving approval from the US Food and Drug Administration (FDA). TRV045 is also being evaluated as a possible epilepsy medication through a collaboration with the National Institutes of Health.
• Key Recruitment: On November 11, 2021, TRVN appointed Ms Patricia Drake as its new Chief Commercial Officer. Ms Patricia formerly worked at Merck, Sharp & Dohme (MSD) Finland as Managing Director and CEO and US Market Operations and Strategy Realization Leader and Leader of Hospital Business Unit in Canada.

Q3FY21 Results:

• Reporting Product Revenues: TRVN reported total revenue of USD 0.18 million for Q3FY21 (ended September 30, 2021), from USD 3.0 million in Q3FY20. However, it didn't report any product revenue in Q3FY20 and the license revenue for the current quarter was USD 69 thousand vs. USD 3.0 million in Q3FY20.
• Surge in Net Losses: TRVN's net loss expanded to USD 13.77 million in Q3FY21 from USD 5.55 million reported in Q3FY20.
• Strong 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 prospects are significantly dependent on the commercial success of OLINVYK, its sole product offering. The successful commercialization of OLINVYK depends on its endorsement by the physicians and the readiness of patients to take it, and their unwillingness to prescribe/continue the drug could harm the company's financial performance.

Outlook:

• Liquidity Outlook: As of Q3FY21, TRVN claimed that it has sufficient liquidity to meet its operating and capital expenditure needs through the Q4FY22.

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.

TRVN Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

TRVN's share price has decreased 65.86% in the past nine months and is currently leaning towards the lower end of its 52-week range of USD 0.63 to USD 3.10. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 39.96. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 0.83.

Considering the correction in the stock price in the past nine months, robust product pipeline, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 0.6999, up 3.77% as of December 15, 2021, 3:31 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.