Arbutus Biopharma Corporation

ABUS Details

Arbutus Biopharma Corporation (NASDAQ: ABUS) is a clinical-stage biopharmaceutical organization engaged in the discovery, development, and marketing of a remedy for individuals suffering from chronic hepatitis B virus (HBV) infection (CHB). It is currently propelling various product candidates with unique action mechanisms with a perceived potential to advance the curative regimen for CHB. In addition, ABUS also started a drug discovery and development exertion for curing coronaviruses (including COVID-19).

FDA Authorization for Progressing with AB-729 Trial: On July 07, 2021, the company stated that the US Food and Drug Administration (FDA) authorized ABUS to begin its Investigational New Drug (IND) application for AB-729 under the Phase 2a clinical trial. In this phase, the company will assess the safety, pharmacokinetics, immunogenicity, and antiviral activity of AB-729 when combined with nucleos(t)ide analog (NA) treatment and short courses of Peg-IFNα-2a in patients with CHB. In addition, to assess AB-729 in combination with other agents, ABUS has signed various clinical collaborations with Assembly Biosciences, Inc., Vaccitech plc, and Antios Therapeutics, Inc.

Q2FY21 Results: During Q2FY21 (ended June 30, 2021), the company reported a 53.83% increase in revenue to USD 2.33 million vs. USD 1.51 million in Q2FY20, resulting from higher license royalty revenue generated from sales of ONPATTRO (Patisiran). Net loss to ABUS shareholders for the quarter was USD 22.65 million, compared to USD 17.08 million in Q2FY20, primarily due to higher clinical development and discovery expenses relating to treatments for COVID-19 and future coronavirus outbreaks (commenced in mid-FY20). The company exited the quarter with a cash balance (including marketable securities) of USD 78.38 million and no outstanding debt.

Key Risks: The company currently does not sell or derive revenues from commercializing any of its product candidates. Its only source of revenue is collaborations and licenses, and royalties. Its financial standing could be adversely impacted if it fails to develop its product candidates, which usually takes time successfully. In addition, even with the revenues generated from licenses and royalties, ABUS faces the risk of profitability with significant resources directed towards R&D. Any adverse results of its trials might harm its earnings.

Outlook: In H2FY21, ABUS expects to get the initial data from AB-729 90 mg multi-dose in HBV DNA positive patients and commence the Phase 2a clinical trials for AB-729 combined with approved or investigational agents. It also plans to begin the Phase 1a/1b trial process for AB-836, a next-gen oral capsid inhibitor, to suppress HBV DNA replication.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

ABUS Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: ABUS' stock price increased 19.90% in the intraday movement and is currently trading towards the higher end of the 52-week range of USD 2.35 to USD 5.87. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 4.07. Considering the significant uptick in the stock price and its loss-making status, we believe the business fundamentals are adequately reflected at the current trading levels. Hence, we recommend a "Sell" rating on the stock at the current price of USD 4.64, up 19.90% as of September 10, 2021, 10:16 AM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

Paysign, Inc.

PAYS Details

Paysign, Inc. (NASDAQ: PAYS) is a payment solutions company that offers prepaid card programs and processing services to corporate, consumer, and government institutions. PAYS markets its prepaid debit card solutions under its PaySign brand and has also developed a card processing platform comprising proprietary systems and software applications catering to the clients' specific demands. Its platform provides transaction processing, cardholder enrolment, value loading, cardholder account management, reporting, and customer care services.

Key Hirings: On August 05, 2021, PAYS announced the appointment of Brad Cunningham as its Chief Technology Officer (CTO). Mr. Cunningham has over 17 years of experience in developing high-availability payment systems that incorporate complicated data analytics. Before joining PAYS, Mr. Cunningham was the senior vice president and managing director of IT Strategy & Services at Republic Bank & Trust Company. In addition, Alan Geiger and Richard Graub joined PAYS as Directors of Relationship Management and Product Management, respectively, at the same time.

Q2FY21 Results: PAYS witnessed YoY growth of 3.23% in total revenue to USD 6.65 million in Q2FY21 (ended June 30, 2021) compared to USD 6.44 million in Q2FY20. The Plasma Industry, which represented 89.42% of the total revenue in Q2FY21, increased by 30.07% YoY, whereas the Pharma Industry decreased by 63.75% YoY. Net loss for the company increased to USD 0.93 million in Q2FY21 vs. USD 0.22 million in Q2FY20. As of June 30, 2021, the company had a cash balance of USD 6.62 million and no outstanding debt.

Key Risks: PAYS depends on several third parties for its network connectivity and gateway services. Therefore, any failure on the contractual obligations by third parties could harm operational and financial performance. Furthermore, PAYS works in the highly competitive IT services business, where it competes directly with larger competitors who have more financial and operational resources. As a result, it must incur significant marketing and rewards programs expenses to increase sales and retain its customers. If the competition intensifies further, or if PAYS fails to manage its expenses, it could hurt its profitability.

Outlook: In FY21, PAYS expects to clock revenue in the range of USD 29.0 – 32.0 million, thus realizing YoY growth of 20% – 32%, along with an adjusted EBITDA ranging between USD 0.75 – 1.90 million. PAYS also forecasts YoY growth of 790 bps in gross margin to 46.5% in FY21.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

PAYS Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: PAYS' share price surged 25.85% during the day and is currently trading in the lower band of its 52-week range of USD 2.34 to USD 6.22. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 2.60. Considering the tremendous intraday movement, growth in topline, current valuation, and associated risks, we recommend a "Sell" rating on the stock at the current price of USD 3.70, up 25.85% as of September 10, 2021, 10:10 AM ET.

* The reference data in this report has been partly sourced from REFINITIV.

*All forecasted figures and industry information have been taken from REFINITIV.  

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