On Monday, H.C. Wainwright adjusted its price target for Sol Gel Technologies Ltd. (NASDAQ:SLGL) shares, a pharmaceutical company, lowering it to $6.00 from the previous target of $9.00. Despite the reduction, the firm maintained a Buy rating on the company's stock. The revision follows a recent announcement by Sol Gel regarding a new commercial partnership.
Sol Gel disclosed late last week that it had signed an asset purchase agreement with Shenzhen Beimei Pharmaceutical Co. Ltd., a China-based company.
This deal grants Beimei the exclusive rights to commercialize Sol Gel's acne treatment, Twyneo, in mainland China, Hong Kong, Macau, Taiwan, and Israel.
In exchange, Sol Gel is set to receive upfront and milestone payments totaling $10 million, as well as royalties on net sales that could reach up to $5 million, all subject to governmental approvals.
According to the terms of the agreement, Sol Gel has received an estimated $1 million in upfront payments and anticipates additional milestone payments starting next year. This partnership aligns with Sol Gel's strategy of regional collaborations to expand the reach of its products, including Twyneo and Epsolay.
The analyst from H.C. Wainwright cited a slower revenue ramp and lower peak sales as the primary reasons for the price target adjustment. This assessment takes into account the performance of Sol Gel's drugs in the U.S. market, which are currently being commercialized by its partner, Galderma.
Sol Gel's management has signaled that the company expects to announce further regional partnerships in the months ahead, which could potentially influence the commercial trajectory of its products. The collaborations are anticipated to cover both Twyneo and Epsolay, expanding Sol Gel's global footprint.
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