Arch Therapeutics Inc. (OTCMKTS:ARTH) To Issue Corporate Update After Stellar Q1 Earnings

Arch Therapeutics Inc. (OTCMKTS:ARTH)

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.

Quarterly Earnings

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.

Public Offering

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.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

Author: Steve Clark

Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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