I own $SPRY in the $8-9 range. The company produces Neffy which is a nasal spray version of an epi pen. The stock is down 27% today not on any business failures but on some short term hopes not being met. I think the negative reaction is seriously overdone. I believe the stock can double in the next 3 years.
The current Enterprise Value is $650mm. I believe the business should trade at 2x 1 year forward sales which would suggest the shares doubling by 2029. The 2x sales is a baseline standard for small cap biotech/pharmaceutical companies. I view that valuation target as quite reasonable with upside potential if the company can grow sales faster.
The product entered the market in 2024 and sold almost $90mm that year. Sales are expected to be $140mm this year and reach close to $600mm by 2029. That is a revenue growth rate of over 300% over the next 4 years. 2 x $600mm sales = $1.2B value versus the $650m EV today.
The business has a gross margin well in excess of 75%. The balance sheet is clean with sufficient cash to reach positive net income by late 2028.
The stock is down today because investors were hoping that more pharmacies would announce that they are stocking the product. These pharmacies generally add products each year starting July 1. The company announced today they it does not expect any new pharmacies to stock the product. The product is readily available already on many major platforms on both an Rx and over the counter basis.
Lastly, the top 4 shareholders of SPRY are all biotech specialist investors. I believe all of them backed the company when it was private. These investors are active on the board and have extensive experience in advising companies on how best to manage product growth and market penetration.
Conclusion: Good product, good financial metrics, strong governance from knowledgeable insiders, potential to double or more over 3 years.