On Monday, H.C. Wainwright showed a continued positive outlook on BioXcel Therapeutics (NASDAQ: BTAI), despite lowering the firm's price target from $7.00 to $5.00. The investment firm maintained a Buy rating on the company's stock. This adjustment follows BioXcel's announcement last month regarding its strategic shift in clinical priorities and an update on its late-stage programs.
BioXcel Therapeutics announced its decision to re-prioritize its clinical development efforts, focusing on the advancement of its leading neuroscience asset, BXCL501, for the treatment of agitation. This strategic move involves optimizing resource allocation and targeting potential new markets. Concurrently, the company plans to de-prioritize sales efforts for IGALMI (dexmedetomidine) sublingual film while keeping the drug available in the market without the current commercial infrastructure.
As a result of the shift in strategy, H.C. Wainwright has revised its sales expectations for BioXcel. The firm now anticipates commercial sales of $4.1 million in 2024 and $5.9 million in 2025, a reduction from the previous forecasts of $4.5 million and $8.8 million, respectively. Additionally, the forecast for SG&A spending has been decreased to $37.4 million for 2024 and is expected to decline further to $19 million in 2025.
The reevaluation of the price target to $5 reflects lowered sales forecasts for BXCL501, BioXcel's lead asset. Despite the reduction in the sales outlook, H.C. Wainwright reaffirms its Buy rating on BioXcel Therapeutics. The firm views the company's strategic decision to focus on clinical development and reduce commercial spending as a positive and potentially beneficial move, albeit one that might have been implemented sooner.
In other recent news, BioXcel Therapeutics reported a Q2 revenue of $1.1 million, primarily from IGALMI sales, exceeding expectations. The company has also announced a strategic workforce reduction of 28%, impacting 15 employees, to focus on the development of its primary neuroscience product, BXCL501. In conjunction with these changes, Matthew Wiley, Senior Vice President and Chief Commercial Officer, has transitioned to a consulting role.
BioXcel Therapeutics has formed a partnership with the University of North Carolina at Chapel Hill to evaluate the effectiveness and safety of BXCL501 for acute stress disorder, with funding support from the U.S. Department of Defense. Meanwhile, important Phase 3 trials named SERENITY At-Home and TRANQUILITY In-Care are underway to assess the safety and efficacy of BXCL501 for patients with bipolar disorders, schizophrenia, and Alzheimer's disease.
On the analyst front, H.C. Wainwright and Canaccord Genuity have maintained their Buy ratings on the company, while Mizuho Securities has adopted a neutral stance due to concerns about the company's financial health.
InvestingPro Insights
Recent InvestingPro data provides additional context to BioXcel Therapeutics' (NASDAQ: BTAI) current financial situation and market performance. The company's market capitalization stands at $23.05 million, reflecting its small-cap status. Despite H.C. Wainwright's optimistic outlook, BTAI's stock has experienced significant declines, with a 79.43% drop over the past six months and an 80.82% decrease year-to-date.
InvestingPro Tips highlight some challenges facing the company. BTAI is operating with a significant debt burden and is quickly burning through cash, which aligns with the company's strategic shift to optimize resource allocation. However, it's worth noting that liquid assets exceed short-term obligations, providing some financial flexibility.
On a positive note, analysts anticipate sales growth in the current year, which could support H.C. Wainwright's maintained Buy rating. Additionally, two analysts have revised their earnings upwards for the upcoming period, suggesting some optimism about the company's future performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 10 additional tips for BTAI, providing a deeper understanding of the company's financial health and market position.
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