FDA And EMA Fast-Track Approvals Will Advance Orphan Treatments

Key Takeaways

• New collaborations and regulatory approvals could quicken market entry, increase revenue, and improve earnings through enhanced access to global markets for orphan disease treatments.
  
• Expanding product indications and strategic launches aim to address unmet needs, potentially boosting revenue and elevating demand within targeted oncology markets.
  
• High reliance on key pipeline programs and bridge financing poses risks of unmet milestones and capital shortages, impacting financial stability and projected growth.

Catalysts

A commercial stage pharmaceuticals company, focuses on developing plant-based prescription medicines for people and animals with gastrointestinal distress, specifically chronic and debilitating diarrhea.

• The expectation of significant collaborations, business development, and licensing deals for products related to rare orphan diseases such as MVID and SBS-IF could lead to an influx of non-dilutive funding, potentially increasing revenues and improving earnings.
  
• The possibility of crofelemer qualifying for expedited regulatory pathways like the EMA’s PRIME or FDA’s Breakthrough Therapy could accelerate market entry, boosting future revenue growth by facilitating faster access to European and U.S. markets.
  
• The ongoing investigator-initiated trials and Phase II studies for crofelemer in treating MVID and SBS-IF could demonstrate proof-of-concept results, leading to potential blockbuster drug status, impacting revenue through expanded market opportunities and increased demand.
  
• The planned expansion of Mytesi’s indication to include prophylaxis of cancer therapy-related diarrhea in adult breast cancer patients, if approved by the FDA, could enhance revenue through increased product use and broadened market access.
  
• The strategic commercial launch of Gelclair into specific oncology-related markets, like bone marrow transplant centers, aims to meet currently unmet needs, potentially increasing revenue and improving net margins due to the high predictability of demand in these areas.

Jaguar Health Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Jaguar Health's revenue will grow by 35.8% annually over the next 3 years.
• Analysts are not forecasting that Jaguar Health will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Jaguar Health's profit margin will increase from -329.3% to the average US Pharmaceuticals industry of 19.7% in 3 years.
• If Jaguar Health's profit margin were to converge on the industry average, you could expect earnings to reach $5.8 million (and earnings per share of $inf) by about April 2028, up from $-38.5 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 0.0x on those 2028 earnings, up from -0.1x today. This future PE is lower than the current PE for the US Pharmaceuticals industry at 16.1x.
• 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 11.41%, as per the Simply Wall St company report.

Jaguar Health Future Earnings Per Share Growth

Risks

• The high reliance on achieving milestones for two major pipeline programs (rare orphan diseases of intestinal failure and cancer therapy-related diarrhea) introduces numerous risks, such as failing to meet clinical endpoints, encountering regulatory challenges, or potential competition, which could negatively impact projected revenue growth.
  
• Jaguar Health's dependence on bridge financing and potential non-dilutive funding implies a risk of running into capital shortages if expected catalysts do not materialize or draw investor interest, potentially affecting earnings and financial stability.
  
• Continued net losses reported in 2024, despite a revenue increase, indicate ongoing operational inefficiencies or higher costs that could erode net margins if left unaddressed.
  
• The company’s focus on its two major programs for MVID and breast cancer therapy-related diarrhea involves lengthy regulatory pathways and requires achieving successful clinical outcomes, presenting execution risks that could delay or prevent realization of expected earnings.
  
• The use of non-GAAP financial measures alongside GAAP figures may obscure the company's true financial performance, potentially leading to misinterpretation of the sustainability of revenue increases by stakeholders.

Valuation

• The analysts have a consensus price target of $150.0 for Jaguar Health based on their expectations of its future earnings growth, profit margins and other risk factors.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $29.2 million, earnings will come to $5.8 million, and it would be trading on a PE ratio of 0.0x, assuming you use a discount rate of 11.4%.
• Given the current share price of $6.1, the analyst price target of $150.0 is 95.9% 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.