What was the cause?
KMPH Stock ,The shares of KemPharm ( KMPH 0.36 percent) were sinking 12.6 percent as of 3.33 p.m. ET on the day of Friday. The major drop was triggered when the company announced the exercise of warrants that were already in place as well as the issuance of new warrants.
So , what’s next?
A warrant is a possibility of buying an amount of stock at a predetermined price and date. In the latest deal by KemPharm, holders who held warrants that were granted for approximately 6.2 million shares got an upgrade. They were offered money in return for promise by KemPharm to issue new warrants.
The new warrants allow the purchase of 1.529,379 KemPharm shares. The holders will be granted the right to purchase shares for $16.50 for each share. They expire December. 31st, 2026.
Investors were not happy since the deal means that further dilution could be on the process. The deal, however, will bring in approximately $39.1 million in net proceeds for KemPharm.
Now , what do you do?
KemPharm anticipates launching Azstarys for treating Attention deficit hyperactivity disorder (ADHD) in about a few months. The drug was granted Food and Drug Administration approval in March. Its stock is expected to join both the Russell 2000 and Russell 3000 indexes as of June 28th. These milestones could be an opportunity to boost the biotech stocks.
KemPharm Returns in comparison to. S&P
| 1 YEAR | 5 YEAR | 5 YEAR ANNUALIZED | SINCE IPO | |
|---|---|---|---|---|
| KMPH | -14.13% | -94.50% | -43.98% | -97% |
| S&P | -7.62% | +49.76% | +8.40% | +97% |
Assets
QUARTERLYANNUAL
| Q3 2022 | YOY CHANGE | |
|---|---|---|
| Net Cash | $70.06M | -46.7% |
| Accounts Receivable | $6.58M | +306.6% |
| Inventory | 0 | – |
Liabilities
QUARTERLYANNUAL
| Q3 2022 | YOY CHANGE | |
|---|---|---|
| Long Term Debt | $13.76M | +933.6% |
| Short Term Debt | $0.48M | +26.2% |
Ratios
QUARTERLYANNUAL
| Q3 2022 | YOY CHANGE | |
|---|---|---|
| Return On Assets | -27.4% | +90.1% |
| Return On Invested Capital | -300.3% | -1.0% |
Cash Flow
QUARTERLYANNUAL
| Q3 2022 | YOY CHANGE | |
|---|---|---|
| Free Cash Flow | -$6.50M | +145.2% |
| Operating Free Cash Flow | -$6.48M | +144.5% |
Valuation
QUARTERLYANNUAL
| Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 | YOY CHANGE | |
|---|---|---|---|---|---|
| Price to Earnings | – | – | – | – | – |
| Price to Book | 2.34 | 1.39 | 1.26 | 2.17 | -13.2% |
| Price to Sales | 10.64 | 8.47 | 15.66 | 20.08 | +73.7% |
| Price to Tangible Book Value | 2.34 | 1.39 | 1.26 | 2.17 | -13.2% |
| Price to Free Cash Flow TTM | 40.53 | 43.50 | 39.18 | 25.24 | – |
| Enterprise Value to EBITDA | -69.89 | -40.97 | -12.57 | -24.66 | -73.2% |
| Free Cash Flow Yield | 2.5% | 2.3% | 2.6% | 4.0% | – |
| Return on Equity | -28.2% | -0.1% | -26.4% | -31.2% | +1.2% |
| Total Debt | $1.61M | $1.51M | $14.36M | $14.24M | +731.7% |
