On Friday, UroGen Pharma (NASDAQ:URGN) experienced a revision in its stock outlook by Oppenheimer, with a slight decrease in the price target from $35.00 to $34.00, while the Outperform rating was retained. The adjustment followed the company's release of its fourth-quarter sales figures for Jelmyto, which achieved $23.5 million, marking a 28% increase year-over-year.
These figures surpassed both Oppenheimer's forecast of $21.8 million and the consensus estimate of $22.6 million. Despite this outperformance, the company faced challenges due to the 340B drug pricing program, which had an estimated $4 million impact on gross-to-net sales throughout 2023.
UroGen Pharma also provided its sales guidance for 2024, estimating revenues to be between $95 million and $102 million. This projection fell short of the anticipated $108 million by the Street, a discrepancy that contributed to a notable decline in the company's stock value on Thursday, dropping 18% in contrast to the 2% dip seen in the Nasdaq Biotechnology Index (NBI).
The firm expressed anticipation for the upcoming durability of response data from the ENVISION trial, expected in June. This data is believed to bolster the New Drug Application (NDA) for UGN-102 as a treatment for low-grade, intermediate-risk non-muscle invasive bladder cancer (NMIBC).
UroGen Pharma is in the process of a rolling submission to the FDA for UGN-102, which is anticipated to be completed in September. The company remains optimistic about receiving Priority Review, which could lead to FDA approval and market launch in the first quarter of 2025.
Looking ahead, Oppenheimer projects that UGN-102 could generate sales of approximately $470 million by 2028. The firm suggests that as investor attention shifts from Jelmyto to UGN-102, UroGen Pharma's shares are expected to perform well. The recent decline in stock price is seen as an opportunity for investors to capitalize on the potential future growth driven by UGN-102.
InvestingPro Insights
As UroGen Pharma (NASDAQ:URGN) navigates through its financial and operational phases, InvestingPro metrics provide a deeper look into the company’s performance and potential. With a market capitalization of $448.8 million, the firm stands as a notable player in its sector. The latest data indicates a substantial gross profit margin of 87.92% for the last twelve months as of Q3 2023, underscoring the company's ability to maintain profitability at the gross level despite broader challenges.
However, this financial strength is juxtaposed with significant concerns, as reflected in the InvestingPro Tips. Analysts have highlighted that UroGen Pharma is quickly burning through cash and have revised their earnings estimates downwards for the upcoming period. Moreover, with the stock experiencing a considerable hit over the past month, with a total return of -23.78%, investor sentiment appears cautious.
While the company does not pay dividends, indicating a reinvestment of earnings into the business, it is also worth noting that UroGen Pharma is not expected to be profitable this year. The absence of profitability is further evidenced by the negative Price/Earnings (P/E) ratio of -4.3, which can be a point of concern for investors looking for current income or stability.
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