Liquidia Technologies Inc

LQDA

LQDA Closes Public Offering of Common Stock: Liquidia Technologies Inc (NASDAQ: LQDA) is a clinical biopharmaceutical company, which is engaged in the development and commercialization of human therapeutics using its exclusive PRINT technology to transform the lives of patients. The company's product candidate consists of LIQ861 and LIQ865, which are in clinical stage. On July 2, 2020, the company stated that it has closed it earlier announced underwritten public offering of 9,375,000 shares for a price of $8.00. The total gross proceeds from this offering amounted to $75 million. Also, the underwriters have been granted a 30-day option to purchase up to an additional 1,406,250 million common shares.

LQDA to Acquire RareGen: On June 29, 2020, the company inked a deal to acquire RareGen, LLC, a portfolio company of PBM Capital, via an all-stock merger, subject to customary closing conditions. Post the buyout, both the company (i.e., Liquidia and RareGen) will merge under a new holding company, called Liquidia Corporation, which is likely to trade on the Nasdaq Capital Market under “LQDA” ticker. As per the deal, LQDA will acquire 100% stake of RareGen for 6,166,666 shares of Liquidia’s common stock. The deal is expected to close in 4QFY20 and was accepted by the Boards of Directors of both Liquidia and RareGen. The buyout strengthens Liquidia’s commitment to the PAH community and positions the company to meet the unmet demands of patients and the healthcare professionals. If approved, the combined entities will aid LQDA in preparation for the potential launch of LIQ861.

1QFY20 Key Financial Highlights: LQDA announced its quarterly results for the period ended 31 March 2020, wherein the company reported a net loss from operations amounting to $14.79 million, as compared to the net loss of $13.77 million in Q1FY19. Diluted net loss per share for the quarter stood at $0.52. Research and development expenses stood at $10.82 million, slightly up from $10.66 million in the previous corresponding year. General and administrative expenses stood at $3.8 million as compared to $3 million in 1QFY19, owing to reclassification of expenses pertaining to potential commercialization and certain insurance costs. The company reported $40.1 million in cash and cash equivalents as on 31 March 2020, and long-term debt amounted to $8.89 million.

1QFY20 Income Statement Highlights (Source: Company Reports)

Key Risks: Higher R&D and SG&A expenses related to certain insurance expenses and the preparation for potential commercialization of product candidate along with increased regulatory expenses are likely to hurt margins, going forward. The company is also exposed to certain other risks such as, foreign currency fluctuation risks, stringent Government regulatory burden and stiff competition from peers. 

Future Expectations: The company remains on track to implement its mission to build and commercialize new products using its proprietary PRINT® technology. Further, in April this year the FDA agreed the NDA of LIQ861 for review and provided a Prescription Drug User Fee Act (PDUFA) target date of November 24, 2020. The acceptance marks a significant milestone and a testament to the progress and further harness the power of its PRINT technology. The company has taken necessary steps in all fronts, to stay afloat during the global crisis, and remain confident in to achieve its 2020 objectives.

Stock Recommendation: The stock of LQDA closed at $6.97 with a market capitalization of ~$263 million. The stock is trading at the lower band of its 52-week trading range of $2.65 to $12.1. The stock of the company went down 16.13% in the last one month. Debt to equity of the company stood at 0.76x in Mar’20, as compared to the industry median of 0.41x. On the valuation front, the stock is trading at a P/BV multiple of 12.1x as compared to the industry average of 5.9x on TTM (Trailing Twelve Months) basis. Considering the above factors, valuation of TTM basis, trading level, and recent deal to acquire RareGen, we have a watch stance on the stock at the closing price of $6.97, up 5.61% on 17 July 2020.

LQDA Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

BOQI International Medical Inc

BIMI Details

A Look at BIMI’s 1QFY20 Financial Highlights: BOQI International Medical Inc (NASDAQ: BIMI) is engaged in offering consumer-directed health products and related services, which includes pharmacy, medical, and behavioral health plans, chronic disease management services as well as health information technology products and services. During the quarter, the company reported revenues from continuing operations of $426,898. Notably, the company did not generate in revenue in the year-ago period. Higher revenue was owing to newly acquired Guanzan Group, which the company completed on 18 March 2020. During the quarter, the company reported operating expenditure from continuing operations of $1,751,453, up from $122,614 reported in the year-ago quarter, mainly due to expenses pertaining to buyout of Boqi Zhengji and Guanzan Group, expenditure related to convertible notes issued in FY19, and higher legal and employee expenses. Net loss from continuing operations for the quarter stood at $1,827,705 as compared to a net loss of $122,614 reported in 1QFY19. The company reported $175,865 in cash and cash equivalents as on 31 March 2020, and accumulated deficit amounted to $13 million at the same period.

1QFY20 Income Statement Highlights (Source: Company Reports)

BIMI completed the Sales of NF Energy Group: On June 23, 2020, BIMI completed the sale of the NF Energy Saving Investment Limited and its subsidiaries for a consideration of $10 million. The company opines that the sale proceeds from the divestment of the NF Energy Group will be a key milestone for BIMI to focus on stronger growth and higher-margin operations in the healthcare business while cutting costs and bolstering its financial position.

Other Recent Updates: On June 4, 2020, the company closed its earlier announced sale of $4.45 million of a new series of senior secured convertible notes to two institutional investors. The notes carry an original issue discount of 19.85%.

Key Risks: The COVID-19 led crisis and mitigation efforts in China have materially impacted the company’s operations. Further, BIMI has incurred additional costs to safeguard its customer’s needs. Higher research and development expenses along with restricted stock availability, delays in sourcing certain products are likely to hurt margins, going forward. The company is also exposed to certain other risks such as, foreign currency fluctuation risks, stringent Government regulatory burden and stiff competition from peers. 

Stock Recommendation: The stock of BOQI closed at $2.05 with a market capitalization of ~$21.3 million. The stock is trading at the lower band of its 52-week trading range of $1.03 to $12. The stock of the company went down 31.67% in the last one month. The sale of NF Energy Group and the convertible notes will provide BIMI with sufficient funds to operate as a going concern in the near term. Debt to equity of the company stood at 0.18x in Mar’20, as compared to the industry median of 1.11x. On the valuation front, the stock is trading at a P/BV multiple of 2.3x as compared to the industry average of 1.6x on TTM (Trailing Twelve Months) basis. Considering the above factors, recently reported revenues due Guanzan Group buyout and disruption caused by COVID-led outbreak, we have a wait and watch stance on the stock at the closing price of $2.05, on 17 July 2020.

BIMI Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.