On Wednesday, Ladenburg Thalmann adjusted its outlook on BiomX (NYSE: NYSE:PHGE) shares, reducing the price target to $2.00 from the previous $4.00. The firm maintained a Buy rating on the stock despite the adjustment. This change comes in the wake of BiomX's latest financial results and recent corporate activities.
BiomX disclosed its first-quarter financials for 2024, reporting earnings per share (EPS) of -$0.28, which missed the consensus estimate of -$0.07 and Ladenburg Thalmann's own estimate of -$0.16. When accounting for a non-cash fair value warrant adjustment, the pro forma EPS stood at -$0.15.
The company has projected that its cash reserves of approximately $44 million at the end of the quarter will be sufficient to fund operations into the fourth quarter of 2025. This timeline extends beyond the expected readouts from two Phase 2 studies in 2025.
In March 2024, BiomX completed a significant strategic move by merging with Adaptive Phage Therapeutics, a private company. Subsequent to the merger, BiomX raised approximately $50 million in a private placement, which included the issuance of over 100 million warrants. The additional share dilution from this private placement and the merger was cited as the primary reason for Ladenburg Thalmann's decision to lower the price target for BiomX's shares.
The revised price target reflects Ladenburg Thalmann's assessment of BiomX's value following these recent developments. The firm's commentary indicates that while the financial results were below expectations and the merger led to dilution, the long-term cash position and the progress towards upcoming clinical milestones justify maintaining a positive rating on the stock.
InvestingPro Insights
Amidst the recent adjustments to BiomX's price target by Ladenburg Thalmann, a closer look at InvestingPro data reveals additional insights into the company's financial health and market performance. BiomX's market capitalization stands at a modest $20.16 million, reflecting a niche position in the market. The company's stock has experienced significant price volatility, with a 65.16% return over the last three months, yet it's important to note that this is coupled with a -18.89% return over the last six months, underscoring the high-risk nature of investing in the stock.
InvestingPro Tips suggest caution due to BiomX's rapid cash burn and weak gross profit margins. Analysts do not expect the company to be profitable this year, with net income projected to fall. However, it's worth acknowledging the company's strong short-term liquidity, as liquid assets surpass short-term obligations, and BiomX operates with a moderate level of debt. These factors may provide some reassurance to investors concerned about immediate financial stability.
For those interested in a deeper analysis, InvestingPro offers additional tips on BiomX, providing a more comprehensive understanding of its financial outlook and market potential. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to an extensive range of financial metrics and expert insights. There are 11 more InvestingPro Tips available that could help investors make more informed decisions regarding BiomX's stock.
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