Arch Therapeutics Inc. (OTCMKTS:ARTH)
Arch Therapeutics Inc. (OTCMKTS:ARTH) will provide a corporate update on June 6, 2017, after reporting first-quarter earnings that met Wall Street estimates. The developer of novel liquid gel and wound care devices says it generated earnings of $0.01 a share for the first three months of the year – a figure which met analyst expectations.
The company did not generate any revenues in Q1 2017. Research and development expenses doubled sequentially to $709,000 from $349,000. Sales and General expenses, on the other hand, came in at $1.5 million compared to $1 million as of the fourth quarter.
Arch Therapeutics Inc. (OTCMKTS:ARTH) net income for the quarter ending March 31, 2017, stood at $1.9 million compared to $1.4 million as of December 31, 2016. The earnings report continues to elicit mixed reaction on the street, given the stock’s rating by various equity firms.
Zack’s Investment Research currently has a ‘buy’ rating on the stock having upgraded it from a ‘hold’. Roth Capital analyst, Michael Higgins, on the other hand, has a buy rating on the stock with a share price target of $3.
“Notable changes to our estimates include FDA 510(k) and CE-mark approval decisions by Q1’18, and reduced development costs related to the internal surgical trials from $8-10 million to $3-5 million. While these updates extend its runway and advance potential revenues, we reiterate our price target which is derived from a comps valuation. Potential bidding war for a partnership with Arch on the horizon As Arch does not intend to build a sales force, we expect a partnership with another company in the hemostat/sealant market within the next year,” said Mr. Higgins.
Early this year Arch Therapeutics Inc. (OTCMKTS:ARTH) carried a public offering of its common stock by pricing 10,166,664 units consisting of its common stock and 0.55 of its Series F Warrant. The Series F warrants came with an exercise price of $0.75 a share and is exercisable for five years.
Gross proceeds from the offering totaled $6.1 million before deduction of offering expenses. Part of the funds will be used to pay down the company’s indebtedness to the Massachusetts Life Sciences Center.
Arch Therapeutics Inc. (OTCMKTS:ARTH) finished the day at $0.485 a share.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.