Sunshine Biopharma, Inc.

Sunshine Biopharma, Inc. (NASDAQ: SBFM) is a Canadian pharmaceutical firm focused on oncology and antiviral medicine research, development, and commercialization. SBFM-PL4 Anti-Coronavirus Treatment and Adva-27a Anticancer Drug are two of the company's drug development projects. The company's drug development efforts are centred on the development of Adva-27a, a small molecule for the treatment of aggressive cancers. Adva-27a is a Topoisomerase II inhibitor that has been demonstrated to kill Multidrug-Resistant Cancer cells such as pancreatic cancer cells, breast cancer cells, small-cell lung cancer cells, and uterine sarcoma cells.

Key Highlights

• The company reported YoY growth of 206.17% in revenue to USD 122.65 thousand in Q1FY22 (ended March 31, 2022) compared to USD 40.06 thousand in Q1FY21.
• In Q1FY22, SBFM net loss reduced to USD 1.24 million from USD 6.19 million in Q1FY21.  
• As of March 31, 2022, the company had cash and cash equivalents of USD 13.18 million and no outstanding debt.
• SBFM’s gross margin for FY21 was 48.4%, significantly lower than the industry median of 86.6%.
• Significant leverage, the company had a debt-to-equity ratio of 17.02x as of FY21.
• SBFM announced a private placement on April 28, 2022, with certain institutional and accredited investors, according to a securities purchase agreement entered into on April 25, 2022, for aggregate gross proceeds of approximately USD 19.5 million, before deducting fees to the placement agent and other offering expenses payable by the Company. The Company issued 4,862,845 units and pre-funded units in connection with the offering at a purchase price of USD 4.01 per unit, priced at the market under Nasdaq regulations. Each unit and the pre-funded unit contains one share of common stock or its equivalent and two non-tradable warrants, each of which is exercisable for one share of common stock for USD 3.76. (for a total of 9,725,690 shares underlying the warrants).
• SBFM Q1FY22 cash cycle of 209 days is significantly higher than the industry median of 60 days.
• Stock is currently trading below its crucial short-term (50-day) and long-term (200-day) SMA support level, a bearish indicator.
• The stock is leaning towards the lower end of its 52-week range of USD 1.51 to USD 62.80.

Conclusion: Considering the company’s strong topline, reduction in net losses, technical indicators, and associated risks. We recommend a "Watch" rating on the stock at the closing price of USD 1.89, down 2.07%, as of May 10, 2022.

Technical Price Chart (May 10, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

*Closing price as of May 10, 2022

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

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. 

Note 3: The report publishing date is as per the Pacific Time Zone.