Maxim Group Downgrades Capnia (CAPN) to Hold
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Maxim Group downgraded Capnia (NASDAQ: CAPN) from Buy to Hold.
Analyst Jason Kolbet commented:
- Capnia recently reported 3Q16 with revenue of $329K and operating expenses of $2.9M for a net loss of $6.4M. The company closed the period with $5.4M in cash. Given the low cash balance we believe its prudent to lower our rating to Hold at this juncture.
- The commercial rollout of Serenz (nasal, non-inhaled CO2 for the treatment of allergic rhinitis) is continuing with the product available over the counter at more than 150 pharmacies across the UK and Ireland (this number may be actually higher since our last check). The company is continuing to prepare for full commercial launch across Europe, which should begin in 2017.
- The pilot commercial rollout, which was used to gather feedback for Serenz to prepare for the full European launch demonstrated that 95% of survey participants reported Serenz met or exceeded expectations, 85% are likely to recommend Serenz to a family member or friend and 82% are very likely or likely to use Serenz again in the future.
- The CoSense End-Tidal Carbon Monoxide (ETCO) Monitor continues to gain significant interest from hospitals and unit placements are continuing to increase.
- On the clinical side in the U.S., two phase II studies evaluating inhaled CO2 for the treatment of Trigeminal Neuralgia (TN) and Cluster Headache continue to enroll. Data from the TN study is expected by the end of the year.
- Conclusion. The cash balance is a concern, in our view. We expect to see the company take steps to strengthen the balance sheet which we would view as a key positive step to allow the company to continue to commercialize its two key products.
Shares of Capnia closed at $0.97 yesterday.
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