Amylyx Pharmaceuticals (AMLX): Assessing Valuation After Class Action Probe Challenges Relyvrio Demand Claims

Amylyx Pharmaceuticals (AMLX) is facing scrutiny after a law firm began investigating the company in response to a class action complaint. The spotlight is on allegations that Amylyx misrepresented the success and sustained demand of its drug, Relyvrio.

See our latest analysis for Amylyx Pharmaceuticals.

After a turbulent year marked by ongoing legal scrutiny, Amylyx Pharmaceuticals has seen its share price rally impressively, with a 282% return year-to-date and a 212% total shareholder return over the past year. This momentum suggests investor optimism is building despite lingering risks.

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With shares rebounding sharply, investors are left to weigh whether recent gains reflect true value or if the market has already factored in all potential upside. This raises the question: is there still a buying opportunity here, or is future growth already priced in?

Price-to-Book of 9.6x: Is it justified?

Amylyx Pharmaceuticals trades at a price-to-book ratio of 9.6x, well above both its peer group and the broader pharmaceuticals sector. With a last close price of $14.95, the market is placing a premium price on the company relative to its underlying net assets.

The price-to-book ratio measures a company's current market price against the value of its assets on the balance sheet. For biopharma firms like Amylyx, high multiples often reflect investor confidence in future innovation and commercial success rather than today's profitability.

However, Amylyx's multiple is more than double the average for its peers (4x), and quadruple the US pharmaceuticals industry average (2.4x). This signals that the market is already pricing in very strong future growth and successful drug commercialization, despite the company's ongoing lack of profitability.

As fair ratio analysis is not available, this premium stands out even more sharply against sector averages. Investors should be mindful that the company is trading significantly above its industry and peer benchmarks.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Preferred multiple of 9.6x (OVERVALUED)

However, ongoing class action investigations and continued lack of profitability remain significant risks, which could quickly dampen recent investor optimism.

Find out about the key risks to this Amylyx Pharmaceuticals narrative.

Build Your Own Amylyx Pharmaceuticals Narrative

If you have your own perspective or want to dig deeper into the numbers, you can quickly piece together your own insights in just a few minutes. Do it your way.

A great starting point for your Amylyx Pharmaceuticals research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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