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Shares of Aperis Pharmaceuticals (APLS) are up more than 25% year-to-date following FDA approval for the treatment of geographic atrophy. Despite the breakthrough, the company’s ability to scale production remains a concern. Moreover, our closest competitors are also nearing approval. Given the poor financial conditions, stretched valuations, and low profitability, it may be wise to avoid stocks for now. Continue reading….
Pharmaceutical stocks have been in the spotlight during the pandemic because the pharmaceutical industry played a key role in the development of vaccines and treatments. Although the benefits from the pandemic have waned, the long-term outlook for the pharmaceutical industry remains favorable given an aging population and rising prevalence of chronic diseases.
However, not all healthcare stocks are in a position to take full advantage of the industry’s growth prospects. For the reasons stated in this article, Apellis Pharmaceuticals, Inc. (APLS) should not be stocks invested in from this industry.
APLS’ fourth-quarter loss per share was below analyst expectations and earnings were 7.6% below consensus expectations. APLS failed to beat the consensus’s EPS estimate in three of his four quarters.
However, the company recently announced that the U.S. Food and Drug Administration (FDA) has approved SYFOVRE (pegcetacoplan injection) for the treatment of geographic atrophy (GA) secondary to age-related macular degeneration (AMD).
SYFOVRE is the first and only FDA-approved treatment for GA. Eleonora Lad, MD, Ph.D., Principal Investigator of the Oaks Study, Director of Ophthalmic Clinical Research and Associate Professor of Ophthalmology at Duke University Medical Center, said: over ten years. ”
“Until now, there has been no approved treatment to offer people with GA due to the relentless loss of vision. It’s finally happening and the effect will grow over time,” she added.
The FDA’s nod to treat geographic atrophy came a week earlier than expected. APLS CEO Cedric Francois said he has 1 million patients in the US and 5 million in the world.
Wedbush analyst Laura Chico believes SYFOVRE $63 million in sales this yearbelow Street’s expectations of $106 million.
APLS stock has risen 42.7% over the past nine months and 47.1% over the past year to close its last trading session at $64.98.
Here are some things that may impact APLS performance in the coming months:
financial disappointment
For the fourth quarter ended December 31, 2022, APLS total revenues decreased 62.4% from the year-ago quarter to $22.66 million. Operating expenses increased 24.7% from the prior year period to $186.72 million. The company’s net loss expanded 12.2% year-on-year to $165.99 million. Additionally, loss per share narrowed 6.8% year-over-year to $1.50.
Mixed analyst estimates
Analysts expect APLS. EPS FY2023 and FY2024 will remain negative. Revenue for fiscal year 2023 and his fiscal year 2024 are expected to rise 153% year-on-year and he 162.6% to $190.81 million and he $501.02 million.
extended evaluation
In terms of forward P/S, APLS’ 39.26x is 780.4% higher than the industry average of 4.46x. Likewise, its 36.93x forward EV/Sales is 827.5% higher than the 3.98x industry average.
low profitability
APLS’ 2.02% Twelve Months Capex/Sales is 55.9% lower than the industry average of 4.58%. Similarly, our asset turnover ratio of 0.09x over the last 12 months is 73% lower than the industry average of 0.34x.
POWR Rating Reflects Dark Outlook
APLS has an overall F rating. POWR rating system. The POWR Rating is calculated by considering 118 individual factors, with each factor being optimally weighted.
Our proprietary rating system also evaluates each stock based on eight different categories. APLS has a D grade in value, consistent with its extended valuation.
The quality is D grade in sync with the low profitability. Also, its 1.20 beta justifies an F grade for stability.
APLS is ranked 164th out of 168 stocks. Medical – Pharmaceuticals industry. click here Access APLS growth, momentum and sentiment ratings.
Conclusion
APLS recently received FDA approval for the treatment of geographic atrophy, and its treatment, SYFOVRE, is expected to be available through specialty distributors and specialty pharmacies nationwide later this month. However, Wedbush analyst Laura Chico believes capacity constraints could impact the launch.
Additionally, APLS may soon face competition from IVERIC bio, Inc. (Really) by the U.S. Food and Drug Administration Avacin captad pegol (ACP) has been submitted for review and the company’s New Drug Application (NDA) has been accepted.is used to treat geographic atrophy (GA) secondary to age-related macular degeneration (AMD).
Given the dismal financial situation, stretched valuations, and low profitability, it may be wise to avoid stocks for now.
Stocks to consider instead of Apellis Pharmaceuticals, Inc. (APLS)
The odds of APLS outperforming in the coming weeks or months are greatly reduced. However, there are many industry peers with impressive POWR ratings. So instead, consider these stocks with an A (strong buy) or B (buy) rating in the medical-pharmaceutical industry.
Novo Nordisk A/S (NVOs)
Bristol-Myers Squibb (BMY)
Amphastar Pharmaceuticals, Inc. (AMPH)
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APLS shares traded at $65.09 per share on Monday morning, up $0.11 (+0.17%). Year-to-date, APLS is up 25.88%, while the benchmark S&P 500 Index is up 6.38% over the same period.
About the author: Dipanjan Benture
Dipanjan has been interested in the stock market since elementary school. This earned him a master’s degree in Finance and Accounting. Today, Dipanjan works as an investment analyst and financial journalist with a keen interest in reading and analyzing emerging trends in financial markets.
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