FDA Approval And Anaphylm Launch Will Expand Global Reach

Key Takeaways

• Success in FDA approval for Anaphylm and Libervant expansion could significantly boost revenue and market penetration.
  
• Targeting international markets and developing new treatments offer potential revenue diversification and growth opportunities.
  
• Aquestive Therapeutics faces significant uncertainties regarding FDA approval and commercialization, legal challenges, and declining revenue components, all impacting future financial performance.

Catalysts

Operates as a pharmaceutical company in the United States and internationally.

• Aquestive is in the process of filing for FDA approval for Anaphylm, their epinephrine sublingual film, aiming for launch in early 2026. Successful approval and launch would likely drive significant revenue growth.
  
• The company is planning to expand into international markets, targeting the EU, U.K., and Canada, which could enhance overall revenue and provide geographic diversification.
  
• Aquestive has initiated development of AQST-108, a topical gel for alopecia areata and other dermatologic conditions, with a Phase IIa trial expected soon. This could potentially open new revenue streams.
  
• Despite legal challenges, Aquestive plans for broader approval of Libervant for wider age groups within 2 years, which could increase sales.
  
• The ongoing commercial preparations and potential collaborations for marketing Anaphylm, if approved, demonstrate a commitment to capturing market share, potentially impacting revenue and market penetration positively.

Aquestive Therapeutics Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Aquestive Therapeutics's revenue will grow by 21.2% annually over the next 3 years.
• Analysts are not forecasting that Aquestive Therapeutics will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Aquestive Therapeutics's profit margin will increase from -76.7% to the average US Pharmaceuticals industry of 20.0% in 3 years.
• If Aquestive Therapeutics's profit margin were to converge on the industry average, you could expect earnings to reach $20.5 million (and earnings per share of $0.17) by about May 2028, up from $-44.1 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 69.7x on those 2028 earnings, up from -6.4x today. This future PE is greater than the current PE for the US Pharmaceuticals industry at 17.2x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.21%, as per the Simply Wall St company report.

Aquestive Therapeutics Future Earnings Per Share Growth

Risks

• Aquestive Therapeutics faces significant uncertainties regarding FDA approval and the commercialization of its products, notably Anaphylm and Libervant, which could negatively impact future revenue and earnings.
  
• There is a notable decline in key revenue components, such as license and royalty revenue and manufacture and supply revenue, which could adversely impact overall revenue growth.
  
• The ongoing legal challenges surrounding Libervant and its market exclusivity could lead to uncertainties in revenue contributions and potential losses if the court rulings are unfavorable.
  
• Increased selling, general, and administrative expenses and research and development costs could negatively affect net margins and earnings, especially if top-line growth does not meet expectations.
  
• Potential challenges in successfully executing partnerships or launching Anaphylm independently could influence commercialization success and projected future revenues.

Valuation

• The analysts have a consensus price target of $9.861 for Aquestive Therapeutics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $15.0, and the most bearish reporting a price target of just $4.75.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $102.4 million, earnings will come to $20.5 million, and it would be trading on a PE ratio of 69.7x, assuming you use a discount rate of 6.2%.
• Given the current share price of $2.84, the analyst price target of $9.86 is 71.3% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.