Athira Pharma, Inc. (ATHA) Bundle
Understanding Athira Pharma, Inc. (ATHA) Revenue Streams
Understanding Athira Pharma, Inc.’s Revenue Streams
Athira Pharma, Inc. has not yet established a commercial organization or generated revenue from drug product sales. The company primarily funds its operations through equity securities and grants.
Breakdown of Primary Revenue Sources
As of September 30, 2024, Athira Pharma has not generated any revenue from drug sales. The company’s funding has been primarily from:
- Sale of common stock
- Convertible preferred stock
- Common stock warrants
- Convertible notes
- Grant income (notably from NIH)
Year-over-Year Revenue Growth Rate
Since the company has not generated revenue from drug sales, year-over-year revenue growth is not applicable. Instead, the focus is on net losses:
- Net loss for the nine months ended September 30, 2024: $81.9 million
- Net loss for the nine months ended September 30, 2023: $90.4 million
- Percentage decrease in net loss: 9%
Contribution of Different Business Segments to Overall Revenue
As of September 30, 2024, the company has no revenue-generating segments. All funding is derived from equity and grants. The table below summarizes the financial data relevant to the company's operations:
| Period | Net Loss (in thousands) | Cash, Cash Equivalents, and Investments (in thousands) | Research and Development Expenses (in thousands) |
|---|---|---|---|
| Nine Months Ended September 30, 2024 | $81,937 | $68,900 | $61,312 |
| Nine Months Ended September 30, 2023 | $90,387 | $110,965 | $70,110 |
Analysis of Significant Changes in Revenue Streams
There have been no significant changes in revenue streams as the company has not yet commenced product sales. The focus remains on research and development activities. The company has raised approximately $407.4 million in net cash proceeds since its inception, primarily through equity offerings.
A Deep Dive into Athira Pharma, Inc. (ATHA) Profitability
A Deep Dive into Athira Pharma, Inc.'s Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the company reported a gross profit margin of 0% as there were no revenues generated. In comparison, the gross profit margin for the same period in 2023 was also 0%.
Operating Profit Margin: The operating profit margin for the nine months ended September 30, 2024, was -98.4%, with a loss from operations of $85.34 million on total operating expenses of $85.34 million. For the corresponding period in 2023, the operating profit margin was -100%, reflecting a loss from operations of $96.45 million on total operating expenses of $96.45 million.
Net Profit Margin: The net profit margin for the nine months ended September 30, 2024, stood at -97.9% with a net loss of $81.94 million. In 2023, the net profit margin was -99.8%, with a net loss of $90.39 million.
Trends in Profitability Over Time
The following table summarizes the profitability metrics over the past two years:
| Metric | 2024 (9 months) | 2023 (9 months) | Change |
|---|---|---|---|
| Gross Profit Margin | 0% | 0% | No Change |
| Operating Profit Margin | -98.4% | -100% | 1.6% Improvement |
| Net Profit Margin | -97.9% | -99.8% | 1.9% Improvement |
Comparison of Profitability Ratios with Industry Averages
The industry average for operating profit margin in the biotechnology sector is typically around -50% to -70%. Comparatively, Athira Pharma's operating profit margin of -98.4% indicates a significant underperformance relative to industry peers.
Similarly, the average net profit margin for biotechnology firms generally ranges from -30% to -60%, placing Athira's net profit margin of -97.9% well below the industry standard.
Analysis of Operational Efficiency
The company’s operating expenses over the nine months ended September 30, 2024, were $85.34 million, down from $96.45 million in 2023, reflecting a 12% decrease in overall operating expenses. This reduction was attributed to lower research and development costs as the company shifted focus from certain drug candidates.
Research and development expenses were $61.31 million for the nine months ended September 30, 2024, compared to $70.11 million for the same period in 2023, marking a decrease of 13%. General and administrative expenses also fell to $19.90 million from $26.34 million, a reduction of 24%.
The following table illustrates the breakdown of operating expenses:
| Expense Type | 2024 (9 months) | 2023 (9 months) | Change |
|---|---|---|---|
| Research and Development | $61.31 million | $70.11 million | -13% |
| General and Administrative | $19.90 million | $26.34 million | -24% |
| Total Operating Expenses | $85.34 million | $96.45 million | -12% |
Debt vs. Equity: How Athira Pharma, Inc. (ATHA) Finances Its Growth
Debt vs. Equity: How Athira Pharma, Inc. Finances Its Growth
The financial structure of a company is crucial for understanding how it finances its growth. Athira Pharma, Inc. primarily relies on equity financing, with significant levels of common stock issuance. As of September 30, 2024, the company had total stockholders' equity of $57.6 million.
Overview of the Company's Debt Levels
As of September 30, 2024, Athira Pharma reported total liabilities of $28.7 million. This includes:
- Current Liabilities: $27.8 million
- Non-Current Liabilities: $912,000
The breakdown of current liabilities includes:
- Accounts Payable: $388,000
- Accrued Liabilities: $16.9 million
- Accrued Legal Settlement: $10 million
- Current Operating Lease Liability: $402,000
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio is a key indicator of financial leverage. For Athira Pharma, the debt-to-equity ratio as of September 30, 2024, is calculated as follows:
Debt-to-Equity Ratio = Total Liabilities / Total Stockholders' Equity
Thus, the ratio is:
Debt-to-Equity Ratio = $28.7 million / $57.6 million ≈ 0.50
This ratio suggests a moderate level of debt compared to equity, which is favorable in the biotech industry, where firms often leverage equity to fund research and development.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
As of the latest reports, Athira Pharma has not issued any new long-term debt. The company has primarily funded its operations through equity securities, raising approximately $407.4 million since inception. There have been no significant credit ratings assigned, as the company operates in a high-risk developmental stage without established revenue streams.
Balancing Between Debt Financing and Equity Funding
Athira Pharma has historically favored equity funding over debt financing. This is evident from its reliance on common stock and convertible notes rather than loans or bonds. The predominant strategy is to avoid the risks associated with debt obligations, especially given its clinical-stage status and ongoing net losses, which amounted to $81.9 million for the nine months ended September 30, 2024.
The following table summarizes the financing activities for the nine months ended September 30, 2024:
| Type of Financing | Amount (in thousands) |
|---|---|
| Proceeds from Stock Options and Employee Stock Purchase Plan | $160 |
| Equity Issuances Since Inception | $407,400 |
| Net Loss for Nine Months | ($81,937) |
This approach highlights Athira Pharma's strategy to utilize equity as the primary method of financing, reflecting a cautious stance towards leveraging debt amid its developmental phase.
Assessing Athira Pharma, Inc. (ATHA) Liquidity
Assessing Athira Pharma, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated at 2.95, indicating a strong liquidity position. This is derived from total current assets of $82.0 million and total current liabilities of $27.8 million.
Quick Ratio: The quick ratio, which excludes inventory from current assets, stands at 2.90, reflecting a solid ability to meet short-term obligations.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, amounts to $54.2 million as of September 30, 2024. This represents a decrease from $125.9 million a year earlier, highlighting a trend of declining working capital.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, reveals the following trends:
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash used in operating activities | ($71,157) | ($74,460) |
| Net cash provided by investing activities | $57,642 | $88,698 |
| Net cash provided by financing activities | $160 | $341 |
| Net (decrease) increase in cash, cash equivalents and restricted cash | ($13,355) | $14,579 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company holds $68.9 million in cash, cash equivalents, and investments. Despite the significant net loss of $81.9 million for the nine months ended September 30, 2024, the current cash position is expected to sustain operations for at least the next 12 months. The liquidity risk is mitigated by the company’s ability to raise capital through various means, including an existing $75 million ATM equity offering.
However, the ongoing need for additional funding remains critical, especially considering the anticipated operational and development expenses.
Is Athira Pharma, Inc. (ATHA) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the company reported a net loss of $81.9 million, compared to a net loss of $90.4 million for the same period in 2023. The accumulated deficit stood at $391.1 million. The cash, cash equivalents, and investments totaled $68.9 million.
Price-to-Earnings (P/E) Ratio
The P/E ratio is currently not applicable as the company has not generated any revenue from drug product sales and has incurred significant net losses.
Price-to-Book (P/B) Ratio
As of September 30, 2024, the total stockholders' equity was $57.6 million, with total assets of $86.2 million and total liabilities of $28.7 million. The P/B ratio can be calculated as follows:
- Price per share: $1.49 (as of October 2024)
- Book value per share: $1.49 (calculated as total equity of $57.6 million divided by 38.7 million shares outstanding)
- P/B Ratio: 1.00
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As the company is in a pre-revenue stage and has not reported EBITDA, the EV/EBITDA ratio is not applicable.
Stock Price Trends
The stock price over the past 12 months has fluctuated significantly. The opening stock price 12 months ago was approximately $2.50, while the current stock price is approximately $1.49. This represents a decline of about 40.4%.
| Period | Stock Price | % Change |
|---|---|---|
| 12 Months Ago | $2.50 | - |
| Current | $1.49 | -40.4% |
Dividend Yield and Payout Ratios
The company has not declared any dividends, and therefore, the dividend yield is 0%.
Analyst Consensus on Stock Valuation
Analyst ratings as of October 2024 indicate a consensus of Hold with a price target range from $1.20 to $2.00.
| Analyst | Rating | Price Target |
|---|---|---|
| Analyst 1 | Hold | $1.20 |
| Analyst 2 | Hold | $1.50 |
| Analyst 3 | Hold | $2.00 |
Key Risks Facing Athira Pharma, Inc. (ATHA)
Key Risks Facing Athira Pharma, Inc.
Athira Pharma, Inc. operates in a highly competitive and regulated environment, facing numerous internal and external risks that could significantly impact its financial health.
Overview of Internal and External Risks
- Industry Competition: The biopharmaceutical industry is characterized by intense competition, with numerous companies vying for market share in the development of neurodegenerative treatments. The company's success in developing ATH-1105 and other drug candidates is contingent upon outperforming these competitors.
- Regulatory Changes: Regulatory hurdles can delay or prevent the approval of new drugs. The company must navigate complex regulatory frameworks, which can change and affect timelines and costs.
- Market Conditions: Fluctuations in market conditions, including economic downturns and changes in investor sentiment, can affect the company’s ability to raise capital and sustain operations.
Operational, Financial, and Strategic Risks
Recent earnings reports have highlighted several key risks:
- Operating Losses: For the nine months ended September 30, 2024, the company reported a net loss of $81.9 million, compared to a loss of $90.4 million for the same period in 2023.
- Cash Flow Constraints: As of September 30, 2024, the company held $68.9 million in cash, cash equivalents, and investments, which is projected to sustain operations for at least the next 12 months.
- Legal Risks: The company incurred legal expenses of $4.1 million in connection with ongoing investigations during the three months ended September 30, 2024.
Mitigation Strategies
The company has outlined several strategies to mitigate these risks:
- Funding Strategies: The company has raised approximately $407.4 million from equity securities since its inception, with plans to utilize an at-the-market equity offering facility of up to $75 million.
- Operational Adjustments: The company plans to focus on the clinical development of ATH-1105 while pausing further development of other drug candidates to conserve resources.
- Regulatory Engagement: Continuous engagement with regulatory authorities to ensure compliance and to expedite the approval processes for clinical trials and drug candidates.
Summary of Financial Data
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Loss | $28.741 million | $32.970 million | Improvement of $4.229 million |
| Operating Expenses | $29.621 million | $35.042 million | Decrease of $5.421 million |
| Cash and Investments | $68.9 million | $110.965 million | Decrease of $42.065 million |
| Accrued Liabilities | $16.961 million | $18.343 million | Decrease of $1.382 million |
These risks and metrics provide a clearer picture of the financial landscape and challenges facing the company as it continues its operations in a competitive and evolving industry.
Future Growth Prospects for Athira Pharma, Inc. (ATHA)
Future Growth Prospects for Athira Pharma, Inc.
Analysis of Key Growth Drivers
The company is focusing on advancing its drug candidates, including ATH-1105, which has shown promising results in early trials. In the nine months ended September 30, 2024, the research and development expenses were $61.3 million, down from $70.1 million in the same period of 2023, indicating a strategic shift towards more efficient spending.
Additionally, the direct costs for the development of ATH-1105 amounted to $6.8 million, a new entry in their pipeline, indicating a shift towards innovative product development.
Future Revenue Growth Projections and Earnings Estimates
As of September 30, 2024, the company has an accumulated deficit of $391.1 million and has not yet generated revenue from drug sales. However, it expects to continue investing heavily in R&D to bring its drug candidates to market.
Net losses for the nine months ended September 30, 2024, were $81.9 million, compared to $90.4 million for the same period in 2023, suggesting potential for narrowing losses as the company refines its focus.
Strategic Initiatives and Partnerships
The company has established an equity offering program with Cantor Fitzgerald and BTIG to raise up to $75 million through at-the-market sales, which could support its funding needs for ongoing and future projects.
Moreover, the company is exploring collaborations and licensing arrangements to enhance its commercial capabilities, which could provide additional revenue streams even before product sales begin.
Competitive Advantages for Growth
The company has a strong intellectual property portfolio, which includes patents for its drug candidates. This positions it well against competitors in the biotechnology sector, as it seeks to protect its innovations.
Additionally, with cash, cash equivalents, and investments totaling $68.9 million as of September 30, 2024, the company is in a relatively strong position to support its growth initiatives.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Research and Development Expenses | $17.9 million | $27.2 million | -34% |
| General and Administrative Expenses | $7.6 million | $7.8 million | -3% |
| Net Loss | $28.7 million | $32.9 million | -13% |
| Cash, Cash Equivalents, and Investments | $68.9 million | N/A | N/A |
| Accumulated Deficit | $391.1 million | N/A | N/A |
The strategic focus on key growth drivers, coupled with its financial data, positions the company for potential growth in the coming years as it continues to develop its innovative drug candidates and explore new partnerships.
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Resources:
- Athira Pharma, Inc. (ATHA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Athira Pharma, Inc. (ATHA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Athira Pharma, Inc. (ATHA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.