On Tuesday, Mizuho (NYSE:MFG) Securities maintained its Neutral rating on BioXcel Therapeutics (NASDAQ:BTAI), with a steady price target of $1.00. The firm's position comes after BioXcel reported its third-quarter results last week, which revealed unexpectedly low Igalmi sales and significantly higher operating expenses, particularly in the cost of goods sold (COGS).
The company has recently launched the Phase 3 SERENITY At-Home study for Igalmi, aiming to broaden the drug's label and potentially enhance future revenues. Top-line data from the At-Home study is anticipated to be available by the third quarter of 2025.
Despite this development, Mizuho expressed concerns about BioXcel's financial outlook. The firm highlighted that BioXcel is currently unable to fully fund the SERENITY At-Home study and has yet to provide formal guidance on its cash runway after suspending it previously.
Furthermore, the company faces immediate liquidity challenges, with an estimated need to secure approximately $20 million by the end of November to comply with its debt covenants and maintain solvency.
The analyst's commentary underscored these concerns, stating that the uncertainty surrounding BioXcel's financial future is a significant factor in maintaining a Neutral stance on the stock. The need for additional funding in the near term raises questions about the company's ability to continue operations without addressing its liquidity issues.
In other recent news, BioXcel Therapeutics reported its third-quarter financial results for 2024, revealing a decrease in net revenue to $214,000 compared to the same quarter in the previous year. However, the company's nine-month revenue showed an overall increase, reaching $1.9 million. Additionally, the net loss was significantly reduced to $13.7 million from $50.5 million in Q3 2023.
In terms of clinical developments, BioXcel Therapeutics initiated two pivotal Phase 3 trials for the drug candidate BXCL501, namely the SERENITY At-Home trial and the TRANQUILITY In-Care trial.
Patient enrollment for the SERENITY trial began in late September 2024, with data readout expected in 9 to 12 months. The company also received direct and actionable feedback from the FDA on the TRANQUILITY trial protocol.
BioXcel Therapeutics is actively exploring strategic financing options to support these ongoing clinical trials and maintain its approved product, IGALMI, on the market. The company is also in discussions with potential strategic partners and is working on strengthening its balance sheet.
These are some of the recent developments that continue to shape the company's trajectory.
InvestingPro Insights
Recent InvestingPro data aligns with Mizuho Securities' cautious stance on BioXcel Therapeutics (NASDAQ:BTAI). The company's market capitalization has dwindled to just $23.63 million, reflecting the market's concerns about its financial health. This is further emphasized by the stock's significant decline, with a one-year price total return of -85.96% as of the latest data.
InvestingPro Tips highlight that BTAI is not profitable over the last twelve months, which corroborates the analyst's concerns about the company's financial outlook. Additionally, the stock has taken a big hit over the last week, dropping 12.78%, which may be a reaction to the recent earnings report and the liquidity challenges mentioned in the article.
Despite these challenges, analysts anticipate sales growth in the current year, according to another InvestingPro Tip. This could be related to the potential expansion of Igalmi's label through the SERENITY At-Home study, although the outcome remains uncertain.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide further insights into BTAI's financial situation and market position.
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