PLx Pharma Looks At Alternatives As Vazalore Faces Macro Headwinds

PLx Pharma Looks At Alternatives As Vazalore Faces Macro Headwinds
  • JMP Securities has downgraded PLx Pharma Inc PLXP to Market Perform from Market Outperform as the company explores strategic alternatives. 
  • PLX Pharma reported 2Q FY22 financial results below expectations, primarily due to lower-than-expected Vazalore sales this quarter ($0.5 million vs. JMP/ consensus estimate of $3.3 million/$3.6 million, respectively). 
  • The management pointed to multiple macro headwinds impacting the launch, JMP writes.
  • The company disclosed that it is exploring strategic options and has implemented a more cost-conscious marketing plan, focused on virtual and digital activities and scaled-down in-person detailing. 
  • The company commented that the current inflationary environment had put pressure on consumer adoption and increased price sensitivity. 
  • JMP adjusted the model, including lowering Vazalore sales estimates in 2H 2022 and beyond. 
  • Vazalore sales estimate supports upside from the current valuation, but JMP believes that the current strategic review process places substantial uncertainty.
  • The stock is currently trading at ~1.3x cash, which the analyst views as a fair value until more visibility on strategic alternatives or the macro environment.
  • Price Action: PLXP shares are down 14.60% at $1.40 during the market session on the last check Monday.

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