Outlook Therapeutics, Inc. (OTLK) is focused on developing ‘bevacizumab,’ an ophthalmic formulation for treating different retinal indications. Recently, Outlook reported positive data for LYTENAVA through multiple clinical trials for wet age-related macular degeneration (wet AMD).
Outlook is expecting approval for its biologics license application (BLA) for LYTENAVA in the first quarter of the calendar year 2023. The company’s pre-launch commercial planning activities are in process for the anticipated approval. Outlook’s recent financing raise of $57.5 million is expected to provide support through this product launch. Upon approval, LYTENAVA can potentially address the multi-billion dollar U.S. market for wet AMD.
For the fiscal year ended September 2021, Outlook incurred a net loss per share of $0.35 as compared to a net loss per share of $0.67 in the prior year.
With these developments in mind, let us take a look at the changes in Outlook’s key risk factors that investors should know.
According to the TipRanks Risk Factors tool, the top two risk categories for Outlook Therapeutics are Tech & Innovation and Finance & Corporate, contributing 32% and 31% to the total 62 risks identified, respectively.
Compared to a sector average of 26%, Outlook’s Tech & Innovation risk factor is at 32%. In its recent annual report, the company has removed one key risk factor from the Finance & Corporate risk category.
This risk pertains to Outlook’s ability to continue as a going concern. Its independent auditors have indicated that the company’s recurring losses, negative cash flows from operations, and accumulated deficit raise significant doubts about its viability. If the company cannot continue as a viable entity, then investors in the company may lose some or all of their investments.
This risk points to the uncertainties that come with investing in biotech stocks. Without commercialized products on the market, biotech companies can incur substantial expenses and a high cash burn rate. This leads them to seek funding to meet capital needs, but it can be dilutive for existing investors.
Wall Street’s Take
On December 23, H.C. Wainwright analyst Douglas Tsao reiterated a Buy rating on the stock alongside a price target of $6 (334.8% upside potential).
Consensus on the Street is a Moderate Buy based on 2 unanimous Buys. The average Outlook Therapeutics price target of $7 implies a potential upside of 407%. That’s after a 44.3% drop in the share price over the last six months.