Akero Therapeutics, Inc. (AKRO) Bundle
Understanding Akero Therapeutics, Inc. (AKRO) Revenue Streams
Understanding Akero Therapeutics, Inc. Revenue Streams
As of September 30, 2024, Akero Therapeutics, Inc. has not generated any revenue from product sales since its inception. The company does not anticipate generating revenue from the sale of products in the near future. Future revenue generation is contingent upon the successful development and potential commercialization of its lead product candidate, EFX, and any additional product candidates that may be developed.
Breakdown of Primary Revenue Sources
- Current Revenue: $0
- Potential Revenue Sources:
- Product sales from EFX upon successful commercialization.
- Collaboration and licensing agreements with third parties.
Year-over-Year Revenue Growth Rate
Since no revenue has been generated to date, the year-over-year revenue growth rate remains at 0%.
Contribution of Different Business Segments to Overall Revenue
As there are currently no revenue-generating segments, the contribution of business segments to overall revenue is as follows:
- Research and Development: 100% (focused on clinical trials and product development)
Analysis of Significant Changes in Revenue Streams
There have been no changes in revenue streams, as the company has consistently reported $0 revenue since inception. The focus remains on advancing clinical development rather than generating immediate revenue.
Financial Overview
Below is a summary of the financial performance related to revenue:
| Period | Revenue | Net Loss | Accumulated Deficit |
|---|---|---|---|
| 9 Months Ended September 30, 2024 | $0 | $(182,036,000) | $(756,132,000) |
| 9 Months Ended September 30, 2023 | $0 | $(96,573,000) | $(574,096,000) |
In summary, Akero Therapeutics, Inc. has not generated any revenue and continues to focus on its research and development efforts, primarily for EFX, which could potentially lead to revenue in the future if successful in clinical trials and approved for commercialization.
A Deep Dive into Akero Therapeutics, Inc. (AKRO) Profitability
A Deep Dive into Akero Therapeutics, Inc.'s Profitability
Gross Profit Margin: As of September 30, 2024, the company reported a net loss of $182.0 million for the nine months ended, indicating no revenue generated, resulting in a gross profit margin of 0%.
Operating Profit Margin: The total operating expenses for the nine months ended September 30, 2024, were $207.4 million, leading to a loss from operations of $207.4 million, which translates to an operating profit margin of -100%.
Net Profit Margin: The net loss for the nine months ended September 30, 2024, was $182.0 million, resulting in a net profit margin of -100%.
Trends in Profitability Over Time
Comparing profitability metrics year-over-year:
- 2024 Net Loss: $182.0 million
- 2023 Net Loss: $96.6 million
- 2022 Net Loss: $112.0 million
This indicates an increase in net losses of approximately 88% from 2023 to 2024.
Comparison of Profitability Ratios with Industry Averages
Industry averages for biotechnology companies typically show:
- Gross Profit Margin: Approximately 70%
- Operating Profit Margin: Approximately 20%
- Net Profit Margin: Approximately 15%
In contrast, the company’s margins reflect substantial operational losses, significantly below industry averages.
Analysis of Operational Efficiency
Key operational metrics include:
- Total operating expenses: $207.4 million
- Research and development expenses: $178.2 million
- General and administrative expenses: $29.2 million
Profitability Trends Table
| Metric | 2024 (9 months) | 2023 (9 months) | 2022 (Year End) |
|---|---|---|---|
| Net Loss ($ million) | 182.0 | 96.6 | 112.0 |
| Operating Expenses ($ million) | 207.4 | 111.0 | 110.0 |
| R&D Expenses ($ million) | 178.2 | 88.4 | 80.0 |
| G&A Expenses ($ million) | 29.2 | 22.6 | 30.0 |
Despite the significant investments in research and development, the company has not yet achieved profitability, reflecting ongoing challenges in operational efficiency and cost management.
Debt vs. Equity: How Akero Therapeutics, Inc. (AKRO) Finances Its Growth
Debt vs. Equity: How Akero Therapeutics Finances Its Growth
As of September 30, 2024, Akero Therapeutics, Inc. reported total long-term debt of $35.1 million and total current liabilities of $43.3 million. The company’s total liabilities amounted to $471.0 million.
Debt Levels
The breakdown of the company's debt structure shows:
| Type of Debt | Amount (in thousands) |
|---|---|
| Current Debt | $401,182 |
| Long-term Debt | $69,824 |
| Total Debt | $471,006 |
Debt-to-Equity Ratio
As of September 30, 2024, the debt-to-equity ratio for the company was calculated as follows:
- Total Debt: $471.0 million
- Total Stockholders' Equity: $738.3 million
- Debt-to-Equity Ratio: 0.64
This ratio is below the biotechnology industry average of approximately 1.0, indicating a relatively lower reliance on debt financing.
Recent Debt Issuances and Credit Ratings
Recent financing activities include:
- In February 2024, the company borrowed an additional $10 million from Hercules Capital under a term loan agreement.
- As of September 30, 2024, the company had a total outstanding loan balance of $35 million under a loan agreement with Hercules.
Balance Between Debt Financing and Equity Funding
Akero Therapeutics has utilized a mix of debt and equity financing to support its growth strategy. Notable equity funding activities include:
- In March 2024, the company raised $366.9 million in a follow-on public offering.
- In April and May 2023, gross proceeds of $127.4 million were raised under an At-The-Market (ATM) offering.
The company continues to balance its funding sources to mitigate risks associated with high debt levels while maintaining sufficient capital for ongoing operations and research and development.
Assessing Akero Therapeutics, Inc. (AKRO) Liquidity
Assessing Akero Therapeutics, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio is approximately 5.1, calculated from current assets of $1,133.2 million and current liabilities of $221.3 million.
Quick Ratio: The quick ratio stands at approximately 5.1, as the majority of current assets are comprised of cash and cash equivalents.
Analysis of Working Capital Trends
As of September 30, 2024, working capital is reported at $911.9 million, reflecting a significant increase from $771.9 million as of December 31, 2023. This increase is attributed to the rise in cash and cash equivalents from financing activities.
Cash Flow Statements Overview
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Used in Operating Activities | ($163,017) | ($96,740) |
| Net Cash Used in Investing Activities | ($124,980) | ($236,409) |
| Net Cash Provided by Financing Activities | $369,855 | $352,814 |
| Net Increase in Cash, Cash Equivalents, and Restricted Cash | $81,858 | $19,665 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company has $787.1 million in cash, cash equivalents, and short- and long-term marketable securities. The company expects this liquidity to be sufficient to fund operations through at least the second half of 2027, given its current operating plan.
However, the company has incurred significant losses, with a net loss of $182.0 million for the nine months ended September 30, 2024, compared to a net loss of $96.6 million for the same period in 2023. The accumulated deficit has reached $756.1 million as of September 30, 2024, raising potential concerns regarding future funding requirements and operational sustainability.
Is Akero Therapeutics, Inc. (AKRO) Overvalued or Undervalued?
Valuation Analysis
Evaluating the financial health of a company involves examining its valuation metrics, which can provide insights into whether the company is overvalued or undervalued. For Akero Therapeutics, Inc. (AKRO), we will analyze key ratios, stock price trends, and analyst consensus.
Price-to-Earnings (P/E) Ratio
As of the latest data, the P/E ratio for Akero Therapeutics is not applicable due to the company reporting a net loss. For the nine months ended September 30, 2024, the net loss was $182.0 million, resulting in a net loss per share of $2.76.
Price-to-Book (P/B) Ratio
The P/B ratio for Akero Therapeutics is calculated as follows:
- Book Value per Share: $10.64 (calculated from total stockholders' equity of $738.3 million and shares outstanding of 69.6 million).
- Current Stock Price: $21.00 (as of the latest trading data).
- P/B Ratio: 1.97 (Current Stock Price / Book Value per Share).
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is not applicable as the company does not currently generate EBITDA due to ongoing operational losses. The enterprise value is calculated as:
- Market Capitalization: $1.46 billion
- Total Debt: $35.0 million.
- Cash and Cash Equivalents: $787.1 million.
- Enterprise Value: $1.46 billion + $35.0 million - $787.1 million = $707.9 million
Stock Price Trends
Over the last 12 months, the stock price of Akero Therapeutics has fluctuated significantly:
- 12 months ago: $15.00
- 6 months ago: $20.00
- Current Price: $21.00
Dividend Yield and Payout Ratios
Akero Therapeutics does not currently pay any dividends, and therefore, the dividend yield and payout ratio are both 0%.
Analyst Consensus on Stock Valuation
The consensus among analysts regarding Akero Therapeutics stock is as follows:
- Buy: 5 analysts
- Hold: 2 analysts
- Sell: 0 analysts
Summary Table of Valuation Metrics
| Metric | Value |
|---|---|
| P/E Ratio | N/A |
| P/B Ratio | 1.97 |
| EV/EBITDA Ratio | N/A |
| Current Stock Price | $21.00 |
| 12-Month Price Range | $15.00 - $21.00 |
| Dividend Yield | 0% |
| Analyst Consensus | 5 Buy, 2 Hold, 0 Sell |
Key Risks Facing Akero Therapeutics, Inc. (AKRO)
Key Risks Facing Akero Therapeutics, Inc.
Understanding the risk factors that could impact the financial health of Akero Therapeutics, Inc. is crucial for investors. The company faces a variety of internal and external risks, including competition, regulatory changes, and market conditions.
Industry Competition
The biotechnology industry is characterized by intense competition. As of September 30, 2024, Akero Therapeutics has reported a net loss of $182.0 million for the nine months ended, compared to $96.6 million for the same period in 2023. The competition from other biotechnology firms developing similar therapies could lead to pricing pressures and reduced market share.
Regulatory Risks
Regulatory changes pose significant risks. The FDA's ability to review and approve new products can be influenced by various factors, including government budget constraints and changes in policy. Delays in approvals could impact the company's timelines and financial forecasts. A prolonged government shutdown could severely hinder the FDA's capacity to process regulatory submissions.
Operational Risks
- As of September 30, 2024, Akero reported an accumulated deficit of $756.1 million.
- The company has no products approved for commercial sale, and it has not generated any revenue to date.
- Significant operating losses are expected to continue, with net losses anticipated to increase as research and development activities ramp up.
Financial Risks
Financially, Akero Therapeutics has incurred substantial losses since its inception. The net losses for the years ended December 31, 2023, and 2022, were $151.8 million and $112.0 million, respectively. Significant research and development expenses are expected to continue, necessitating additional funding to support ongoing operations. As of September 30, 2024, the company had $787.1 million in cash, cash equivalents, and marketable securities.
Market Conditions
Market acceptance of the company's product candidates, including pricing and reimbursement considerations, can significantly affect financial performance. The overall market conditions for biotechnology can fluctuate based on economic cycles and investor sentiment, impacting the company’s ability to raise capital.
Mitigation Strategies
To mitigate these risks, the company has raised significant capital through various offerings. For instance, in March 2024, Akero raised gross proceeds of $366.9 million from a follow-on public offering. Furthermore, the company continues to explore partnerships and collaborations to enhance its financial stability and operational capabilities.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | Intense competition from other biotech firms. | Potential for reduced market share and pricing pressure. |
| Regulatory Risks | Delays in FDA approvals and potential changes in regulations. | Impact on timelines and financial forecasts. |
| Operational Risks | No approved products and significant ongoing losses. | Accumulated deficit of $756.1 million. |
| Financial Risks | Dependence on continued funding and significant R&D expenses. | Net losses of $182.0 million for the nine months ended September 30, 2024. |
| Market Conditions | Fluctuations in biotechnology market conditions. | Impact on capital raising efforts and overall financial health. |
Future Growth Prospects for Akero Therapeutics, Inc. (AKRO)
Future Growth Prospects for Akero Therapeutics, Inc.
Analysis of Key Growth Drivers
The primary growth driver for Akero Therapeutics, Inc. is its innovative product pipeline, particularly the lead candidate, EFX, which is being developed for the treatment of metabolic diseases such as MASH (Metabolic Dysfunction-associated Steatotic Liver Disease). The success of ongoing clinical trials, including the Phase 2b SYMMETRY and HARMONY studies, is crucial. The SYMMETRY study aims to report results in February 2025, and its success could significantly impact future revenue streams.
Future Revenue Growth Projections and Earnings Estimates
As of September 30, 2024, Akero has not yet generated revenue from product sales. The company anticipates that if EFX receives regulatory approval, it could lead to substantial revenue generation. Analysts estimate that the global market for MASH treatments could exceed $6 billion by 2028, providing a lucrative opportunity for Akero if EFX is commercialized successfully. Earnings estimates project losses of $182 million for the nine months ended September 30, 2024, with continued investment in R&D.
Strategic Initiatives or Partnerships
Akero has formed strategic partnerships, notably a $25 million equity investment from Pfizer, which enhances its financial stability and credibility in the industry. Additionally, the company has raised funds through various offerings, including $366.9 million from a follow-on public offering in March 2024, which will support ongoing clinical trials and operational costs.
Competitive Advantages
Akero has several competitive advantages, including its proprietary technology platform and a strong intellectual property portfolio. The unique mechanism of EFX, a differentiated FGF21 analog, positions the company favorably against competitors in the metabolic disease space. Moreover, Akero's strong cash position of $787.1 million as of September 30, 2024, supports its long-term growth strategy.
| Key Financial Metrics | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Cash, Cash Equivalents and Marketable Securities | $787.1 million | $580.3 million |
| Net Loss (Nine Months) | $182 million | $96.6 million |
| Research and Development Expenses | $178.2 million | $88.4 million |
| General and Administrative Expenses | $29.2 million | $22.6 million |
| Debt Financing | $35 million (Term Loan) | $25 million (from Pfizer) |
Overall, Akero Therapeutics is well-positioned for growth, given its innovative product pipeline, strategic partnerships, and strong financial backing. The successful development and commercialization of EFX could pave the way for significant revenue in the burgeoning market for metabolic disease treatments.
Akero Therapeutics, Inc. (AKRO) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Akero Therapeutics, Inc. (AKRO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Akero Therapeutics, Inc. (AKRO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Akero Therapeutics, Inc. (AKRO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.