Targeted Oncology Platform Will Drive Expanding Treatment Adoption Over The Coming Years

Catalysts

About RenovoRx

RenovoRx is a clinical stage medical technology company developing targeted intra arterial drug delivery solutions for difficult to treat solid tumors.

What are the underlying business or industry changes driving this perspective?

• Growing adoption of minimally invasive, targeted oncology treatments positions TAMP and RenovoCath to capture increasing procedure volume at academic, NCI designated and high volume community centers. This supports sustained revenue growth as the installed base of treating sites expands.
• Approaching Phase III TIGeR PaC enrollment completion and a potential positive data readout can transform RenovoCath from a stand alone device into a drug device treatment option. This can enable premium pricing, broader indications and a step function increase in revenue and earnings power.
• Real world registry data and cost neutral investigator initiated studies across additional solid tumors can expand the addressable market from an estimated 400 million dollar device opportunity in pancreatic cancer to a multi billion dollar platform. This can improve long term top line visibility and operating leverage.
• Lean, capital efficient commercial build out, including experienced sales leadership and regional managers, is designed to shorten sales cycles and deepen utilization per center. This should enhance net margins as fixed costs are leveraged over a higher revenue base.
• Domestic, scalable manufacturing with improving cost of goods and more than two year product shelf life provides supply reliability and margin expansion potential. Combined with rising sales, this can reduce cash burn and accelerate the path toward positive operating earnings.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming RenovoRx's revenue will grow by 267.1% annually over the next 3 years.
• Analysts assume that profit margins will increase from -1196.7% today to 24.8% in 3 years time.
• Analysts expect earnings to reach $11.4 million (and earnings per share of $0.27) by about December 2028, up from $-11.1 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 22.1x on those 2028 earnings, up from -3.2x today. This future PE is greater than the current PE for the US Biotechs industry at 19.0x.
• Analysts expect the number of shares outstanding to grow by 0.28% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.05%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The commercial adoption curve for RenovoCath may remain slower than implied by management commentary, as evidenced by only $900,000 of revenue in the first nine months of 2025 despite fourteen centers being approved and a much larger theoretical $400 million device opportunity. This would constrain near term and long term revenue growth and delay operating leverage in net margins and earnings.
• Dependence on a single flagship Phase III trial, TIGeR PaC, with enrollment not expected to complete until early 2026 and final data only anticipated in 2027, exposes the company to significant clinical and regulatory risk over an extended period. Any delay, inconclusive outcome or safety concern could undermine the TAMP platform narrative and negatively impact future revenue, reimbursement access and earnings.
• The need to refresh the shelf registration and establish an at the market offering by mid 2026, combined with only a little over $10 million in cash against R and D and SG and A expenses of $1.7 million each in the latest quarter, suggests a high probability of future equity or debt financing that could be dilutive or costly. This could put pressure on earnings per share, net margins and ultimately the share price even if top line revenue grows.
• Management is intentionally concentrating resources on the U.S. market despite acknowledging international potential and other solid tumor indications. This focus may allow competing technologies or alternative targeted delivery platforms to capture share in global oncology markets and limit RenovoRx's ability to scale revenues and expand margins over the long term.
• The early commercial model relies on a lean sales force and physician to physician advocacy to drive adoption across complex multidisciplinary cancer centers. However, variability in sales cycles, the need for intensive training and the limited number of active treating centers today suggest that sustained penetration may require significantly higher commercial investment than planned, pressuring operating expenses, delaying improvements in net margins and slowing the trajectory of earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of $5.56 for RenovoRx 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 $12.5, and the most bearish reporting a price target of just $2.75.
  
• In order for you to agree with the analysts, you'd need to believe that by 2028, revenues will be $45.9 million, earnings will come to $11.4 million, and it would be trading on a PE ratio of 22.1x, assuming you use a discount rate of 7.0%.
  
• Given the current share price of $0.96, the analyst price target of $5.56 is 82.7% 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.