The analyst recently reduced 2020 and 2021 revenue estimates from the prior forecasts of $73.2 million and $136.2 million to $63.1 million and $86.9 million, respectively.
As a result, Selvaraju also reduced his price target from $9 to $5.5. Despite the haircut, the new figure still implies a whopping 194%. Unsurprisingly, Selvaraju’s Buy rating remains intact. (To watch Selvaraju’s track record, click here)
Rockwell’s main revenue driver is Triferic, the only FDA-approved therapy designated to replace iron and preserve hemoglobin in adult hemodialysis patients with chronic kidney disease.
Selvarju expects “persistent headwinds due to the COVID-19 pandemic” to impact its sales and forecasts “only gradual uptake” of Triferic AVNU – the new formulation of the treatment for intravenous infusion – which was granted FDA approval last year.
The sales outlook might be depressed; however, Rockwell is making progress elsewhere.
Last week, the company announced that its partner in South Korea, Jeil Pharmaceutical, filed New Drug Applications (NDAs) with the country’s Ministry of Food and Drug Safety (MFDS) for Triferic AVNU and Triferic Dialysate for the same indication as the one granted U.S. approval.
Rockwell has an agreement in place with Jeil, for which it received an upfront payment in exchange for the exclusive development and commercial rights for Triferic in South Korea. The company is also entitled to milestone payments and royalties on net sales.
Furthermore, in mid-January, Rockwell’s Chinese partner Wanbang Biopharmaceuticals—a Shanghai Fosun Pharmaceutical subsidiary—kicked off a pivotal Phase 3 trial for Triferic Dialysate with the first patient enrolled. This could lead to regulatory approval eventually in China as well.
Should these developments reach fruition, they could impact Slevaraju’s RMTI model, as it is currently based solely on the Triferic franchise’s U.S. sales.
“Accordingly,” said the 5-star analyst, “Royalty-based revenues from sales of Rockwell’s products by its partners in territories outside the U.S. could drive upside to our forecasts. Further, we anticipate that Rockwell Medical could identify licensees or commercial distribution partners in both Europe and Japan within the course of the coming months, which may augment the potential for the Triferic franchise outside the U.S.”
Selvaraju’s is the only recent review on RMTI stock, making this the default view among the analyst corps. (See RMTI stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.