Trevena, Inc. (TRVN) Bundle
Understanding Trevena, Inc. (TRVN) Revenue Streams
Understanding Trevena, Inc.’s Revenue Streams
Trevena, Inc. derives its revenue primarily from the sale of OLINVYK and licensing agreements related to the drug's development and commercialization, particularly in China and South Korea.
Breakdown of Primary Revenue Sources
Revenue is categorized into product revenue and license and royalty revenue:
- Product Revenue: For the three months ended September 30, 2024, the company recorded a product revenue of $(21,000) due to a returns reserve adjustment of $26,000. For the nine months ended September 30, 2024, product revenue was $13,000.
- License and Royalty Revenue: For the three months ended September 30, 2024, this revenue was $304,000, and for the nine months, it amounted to $615,000.
Year-over-Year Revenue Growth Rate
The following table illustrates the year-over-year revenue growth rate for Trevena, Inc.:
| Period | Product Revenue | License and Royalty Revenue | Total Revenue |
|---|---|---|---|
| Three Months Ended September 30, 2024 | $(21,000) | $304,000 | $283,000 |
| Three Months Ended September 30, 2023 | $1,000 | $179,000 | $180,000 |
| Nine Months Ended September 30, 2024 | $13,000 | $615,000 | $628,000 |
| Nine Months Ended September 30, 2023 | $28,000 | $3,179,000 | $3,207,000 |
Contribution of Different Business Segments to Overall Revenue
The contribution of different business segments to the overall revenue for the nine months ended September 30, 2024, was:
- Product Revenue Contribution: 2.07% of total revenue
- License and Royalty Revenue Contribution: 97.93% of total revenue
Analysis of Significant Changes in Revenue Streams
There was a notable decline in product revenue, which went from $28,000 in the first nine months of 2023 to $13,000 in the same period of 2024, indicating a decrease of 53.57%. In contrast, license and royalty revenue experienced a significant drop from $3,179,000 in 2023 to $615,000 in 2024, a decrease of 80.68%.
The overall revenue for Trevena, Inc. decreased from $3,207,000 in the first nine months of 2023 to $628,000 in 2024, representing a decline of 80.39%.
This decline can be attributed to a combination of factors including adjustments related to expected returns and a reduction in commercial support for OLINVYK as the company seeks strategic alternatives .
A Deep Dive into Trevena, Inc. (TRVN) Profitability
Profitability Metrics
The financial health of the company can be assessed through key profitability metrics such as gross profit, operating profit, and net profit margins. As of September 30, 2024, the financial results are as follows:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Total Revenue | $283,000 | $180,000 | $628,000 | $3,207,000 |
| Cost of Goods Sold | $114,000 | $175,000 | $305,000 | $389,000 |
| Gross Profit | $169,000 | $5,000 | $323,000 | $2,818,000 |
| Operating Expenses | $5,860,000 | $9,007,000 | $22,586,000 | $28,348,000 |
| Loss from Operations | $(5,577,000) | $(8,827,000) | $(21,958,000) | $(25,141,000) |
| Net Loss | $(4,939,000) | $(7,930,000) | $(17,508,000) | $(23,761,000) |
The gross profit margin for the three months ending September 30, 2024, was approximately 59.8% compared to 2.8% in the same period in 2023. Over the nine months, the gross profit margin was approximately 51.4%, a significant increase from 87.8% the previous year, primarily due to decreased revenues.
Trends in Profitability Over Time
Analyzing the trends in profitability, the company has shown improvement in gross profit margins despite continuous net losses. The net loss for the nine months ended September 30, 2024, decreased by $6.3 million compared to the same period in 2023, reflecting a reduction in operational expenses, particularly in selling, general, and administrative costs, which fell by 16%.
Comparison of Profitability Ratios with Industry Averages
In comparison to industry averages, the company’s gross profit margin of 59.8% significantly exceeds the industry average of approximately 45%. However, the net profit margin remains negative, with an overall industry average net profit margin of around 10%.
Analysis of Operational Efficiency
Operational efficiency is gauged through cost management and gross margin trends. The company has effectively reduced its selling, general, and administrative expenses from $15.8 million in the nine months of 2023 to $13.3 million in 2024. This reduction is attributed to the scaling back of commercial activities related to OLINVYK and a decrease in research and development costs, which fell from $12.2 million to $9.0 million during the same period.
| Expense Type | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | Change |
|---|---|---|---|
| Selling, General & Administrative | $13,323,000 | $15,799,000 | $(2,476,000) |
| Research & Development | $8,958,000 | $12,160,000 | $(3,202,000) |
| Total Operating Expenses | $22,586,000 | $28,348,000 | $(5,762,000) |
Debt vs. Equity: How Trevena, Inc. (TRVN) Finances Its Growth
Debt vs. Equity: How Trevena, Inc. Finances Its Growth
As of September 30, 2024, Trevena, Inc. reported a total debt of $34.5 million in principal and accreted interest, with a carrying value of $32.9 million after accounting for an unamortized debt discount of $1.7 million. The current portion of loans payable stands at $902,000.
Debt Levels
The company has engaged in both long-term and short-term debt. The long-term debt primarily consists of a royalty-based loan agreement established in April 2022, which allows Trevena to borrow up to $40 million in three tranches. As of now, the company has drawn down $34.5 million.
Debt-to-Equity Ratio
The debt-to-equity ratio is a critical measure for assessing financial leverage. As of September 30, 2024, Trevena's total liabilities amount to $42.5 million, while total stockholders’ deficit is reported at $23.3 million. This results in a debt-to-equity ratio of approximately 1.83. This ratio is significantly higher than the average for the biotechnology industry, which typically ranges from 0.5 to 1.0.
Recent Debt Issuances and Refinancing Activity
In July 2024, Trevena amended its Loan Agreement with R-Bridge, receiving a $2 million payment and eligibility for an additional $8 million based on achieving specific U.S. commercial milestones. The outstanding liability was also reduced by $10 million as a part of this amendment.
Credit Ratings
As of September 30, 2024, Trevena does not have an official credit rating from major rating agencies. However, the company's ability to continue as a going concern has been evaluated, and substantial doubt exists regarding its capacity to fund operations without raising additional capital.
Balancing Debt Financing and Equity Funding
Trevena has historically funded its operations primarily through equity securities and debt borrowings. As of September 30, 2024, the company had $13.5 million in cash and cash equivalents. In the nine months ended September 30, 2024, net cash used in operating activities was $21.1 million, indicating a reliance on financing activities to cover operational deficits.
| Category | Amount (in thousands) |
|---|---|
| Total Debt | $34,546 |
| Unamortized Debt Discount | $1,672 |
| Carrying Value of Debt | $32,874 |
| Current Portion of Loans Payable | $902 |
| Total Liabilities | $42,497 |
| Total Stockholders' Deficit | $23,309 |
| Debt-to-Equity Ratio | 1.83 |
Assessing Trevena, Inc. (TRVN) Liquidity
Assessing Trevena, Inc.'s Liquidity
The liquidity position of Trevena, Inc. can be evaluated through key financial metrics such as the current and quick ratios, working capital trends, and cash flow statements.
Current and Quick Ratios
As of September 30, 2024, Trevena, Inc. reported:
- Current Assets: $14.1 million
- Current Liabilities: $6.1 million
- Current Ratio: 2.31
- Quick Assets: $13.5 million
- Quick Liabilities: $6.1 million
- Quick Ratio: 2.21
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, stood at:
- Working Capital (Sept 30, 2024): $9.6 million
- Working Capital (Dec 31, 2023): $15.5 million
This reflects a decrease in working capital, primarily driven by operational losses and cash flow usage.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, indicates:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Used in Operating Activities | ($21,106) | ($27,050) |
| Net Cash Used in Investing Activities | $0 | ($20) |
| Net Cash Provided by Financing Activities | $1,675 | $22,282 |
| Net Decrease in Cash | ($19,431) | ($4,788) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, Trevena, Inc. had:
- Cash and Cash Equivalents: $13.5 million
- Restricted Cash: $0.6 million
- Accumulated Deficit: $605.6 million
Management has expressed substantial doubt about the company's ability to continue as a going concern, indicating that the current cash levels may not be sufficient to fund operations for the next year. The need for additional funding through equity or debt financing is critical.
Is Trevena, Inc. (TRVN) Overvalued or Undervalued?
Valuation Analysis
As of 2024, the valuation of Trevena, Inc. is assessed through various financial ratios and stock performance metrics. Below is a detailed analysis of the key valuation ratios and stock trends.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a common metric used to determine if a stock is overvalued or undervalued. As of September 30, 2024, Trevena, Inc. reported a net loss per share of $20.54 for the nine months ended September 30, 2024. Given that the company is not currently profitable, the P/E ratio is not applicable.
Price-to-Book (P/B) Ratio
The P/B ratio compares a company's market value to its book value. As of September 30, 2024, Trevena's total stockholders' equity was reported at ($23.3 million). The company’s market capitalization fluctuated around $3.74 per share post-reverse stock split, with approximately 854,769 shares outstanding.
- Market Capitalization: $3.2 million (calculated as $3.74 x 854,769)
- P/B Ratio: Not applicable due to negative equity.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As of the latest reports, Trevena has not generated positive EBITDA, thus making the EV/EBITDA ratio calculation infeasible. The company reported a net loss of $17.5 million for the nine months ended September 30, 2024.
Stock Price Trends
Over the last 12 months, Trevena's stock price has shown significant volatility. The stock price experienced a reverse split of 1-for-25 on August 13, 2024. Prior to the split, the stock traded as low as $0.15 and peaked at around $5.13. Following the reverse split, the stock was trading at approximately $3.74 per share as of September 30, 2024.
Dividend Yield and Payout Ratios
Trevena, Inc. does not currently pay any dividends, as it has not achieved profitability. The dividend yield remains at 0%.
Analyst Consensus on Stock Valuation
Analysts have provided varied recommendations on Trevena's stock. Currently, there is a consensus leaning towards a Hold rating, reflecting skepticism about the company’s ability to generate consistent revenue from its product pipeline.
Key Financial Metrics Summary
| Metric | Value |
|---|---|
| P/E Ratio | N/A (Net Loss) |
| P/B Ratio | N/A (Negative Equity) |
| EV/EBITDA Ratio | N/A (Negative EBITDA) |
| Stock Price (as of 09/30/2024) | $3.74 |
| Market Capitalization | $3.2 million |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Trevena, Inc. (TRVN)
Key Risks Facing Trevena, Inc. (TRVN)
Overview of Internal and External Risks
The financial health of Trevena, Inc. is significantly influenced by various internal and external risk factors. These include:
- Market Competition: The biopharmaceutical industry is highly competitive, with numerous companies vying for market share. Trevena faces competition from established pharmaceutical firms and emerging biotech companies.
- Regulatory Changes: Changes in regulations regarding drug approval processes can impact the timeline and cost of bringing new products to market.
- Market Conditions: Economic downturns can affect funding availability and consumer demand for pharmaceutical products.
Operational, Financial, or Strategic Risks
Recent earnings reports have highlighted several operational and financial risks:
- Accumulated Deficit: As of September 30, 2024, Trevena reported an accumulated deficit of $605.6 million.
- Net Losses: The company incurred a net loss of $17.5 million for the nine months ended September 30, 2024, compared to a net loss of $23.8 million for the same period in 2023.
- Cash Flow Issues: The net cash used in operating activities was $21.1 million for the nine months ended September 30, 2024, down from $27.1 million in 2023.
| Financial Metric | 2024 (9 Months Ended) | 2023 (9 Months Ended) |
|---|---|---|
| Net Loss | $17.5 million | $23.8 million |
| Net Cash Used in Operating Activities | $21.1 million | $27.1 million |
| Product Revenue | $13,000 | $28,000 |
| License and Royalty Revenue | $615,000 | $3.2 million |
Mitigation Strategies
Management has acknowledged substantial doubt regarding the company's ability to continue as a going concern, primarily due to cash flow limitations. Strategies to mitigate risks include:
- Capital Raising: The company plans to raise additional capital through equity or debt financing, with approximately $33.7 million of available capacity from a shelf registration statement as of September 30, 2024.
- Cost Management: A reduction in operating expenses is anticipated as commercial support for OLINVYK is eliminated. The total operating expenses for the nine months ended September 30, 2024, were $22.6 million, down from $28.3 million in 2023.
- Strategic Collaborations: The company is exploring partnerships to advance its product candidates, including TRV045.
Future Growth Prospects for Trevena, Inc. (TRVN)
Future Growth Prospects for Trevena, Inc.
Analysis of key growth drivers:
- Product Innovations: The company is advancing its product pipeline, including TRV045 and TRV734, which are under development for various indications. The successful commercialization of these products could significantly boost revenue.
- Market Expansions: Trevena has secured licensing agreements for OLINVYK in China and South Korea, generating approximately $12.1 million from these agreements as of September 30, 2024 .
- Acquisitions: Strategic partnerships and collaborations are being sought to enhance product development and commercialization efforts, particularly for OLINVYK and its other drug candidates.
Future revenue growth projections and earnings estimates:
The total revenue for the nine months ended September 30, 2024, was $628,000, a decrease from $3.2 million in the same period in 2023. The decline was primarily attributed to lower license and royalty revenue, which fell to $615,000 from $3.2 million year-over-year. However, the company anticipates that a more focused approach on its key product candidates will lead to improved financial performance in the coming years.
Strategic initiatives or partnerships that may drive future growth:
- Commercial Partnerships: The company is actively seeking a commercial partner for OLINVYK to expand its market presence and drive sales.
- Research Collaborations: Ongoing collaborations for the development of TRV045 and TRV734 are expected to enhance the company's pipeline and lead to potential approvals and commercialization.
Competitive advantages that position the company for growth:
- Specialization in CNS Disorders: The company focuses on central nervous system disorders, an area with significant unmet medical needs, providing a strong market opportunity for its products.
- Established Intellectual Property: Trevena has developed a robust intellectual property portfolio that supports its product candidates, enhancing its competitive position in the market.
| Financial Metrics | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $283,000 | $180,000 | +57% |
| Net Loss | $(4.9 million) | $(7.9 million) | +38% |
| Cash and Cash Equivalents | $13.5 million | $35.5 million | -62% |
| Accumulated Deficit | $(605.6 million) | $(588.1 million) | -3% |
As of September 30, 2024, the company reported cash and cash equivalents of $13.5 million and an accumulated deficit of $605.6 million . The financial health indicates ongoing challenges, but potential exists through focused product development and strategic partnerships.
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Updated on 16 Nov 2024
Resources:
- Trevena, Inc. (TRVN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Trevena, Inc. (TRVN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Trevena, Inc. (TRVN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.