Aim for 55.00 USD

30 เม.ย. 2021

Cash reserves were 58.2M at 2020 end and enough till 2021 end. The operating cash burn was 18.4M in 2020. There's no long-term debt. The current market cap is only 505M (enterprise value of 392M), which is low considering my estimate of 22B/YEAR peak sales potential for FB-401 in AD (at 50% market share). On a relative valuation basis, Pfizer acquired Anacor Pharmaceuticals (for topical crisaborole) for $5 billion (at estimated $2 billion/year of peak sales), however topical crisaborole sales have failed to meet expectations due to side effects. Institutions have accumulated the stock on the recent pullback this year. Perceptive Advisors increased stake from 2.6% to 5.2% this month. Biotechnology Value Fund increased stake to 6.7% last month. Orbimed reported a new 4.7% stake last month. The stock was trading around $51 after the above-mentioned Phase 1a/2 study data last year and pulled back 50% from 52-week high in the absence of significant catalysts. The stock is up >50% from its last month's lows and has strong buying interest. I expect it to trade above 50/share on successful Phase 2 results in mid-2021.

Risks in the investment include underwhelming data in Phase 2 AD trial due to a lower than expected response in adults (though I expect better data than Phase 1a/2 study due to longer duration of action), unexpected side effects, etc. This is a high-risk developmental stage pharmaceutical company with no revenue, a single product candidate and may not be suitable for all investors.