Cantor Fitzgerald Downgrades Apricus Biosciences (APRI) to Hold

Cantor Fitzgerald downgraded Apricus Biosciences (NASDAQ: APRI) from Buy to Hold with a price target of $1.50 (from $3.00). Analyst Irina Rivkind Koffler called its SERM deal dilutive.

"Last week Apricus announced it licensed U.S. development and commercialization rights for Fispemifene from Forendo Pharma for the treatment of secondary hypogonadism (low testosterone). The company paid Forendo $12.5M upfront for the compound ($5M in cash and $7.5M in common stock) and borrowed $10M at 7.9%, which covers the upfront cash payment and the cost of the Fispemifene Phase IIb trial that is expected to begin in 1H:15. If the entire clinical program is successful, we would expect this drug to reach the market in 2020, and therefore, the upfront payment and anticipated research costs are dilutive to APRI for now," said Rivkind Koffler.

"Management indicated it has sufficient cash through 2015 but may in tandem monetize OUS rights to RayVa (for Raynaud's Syndrome) and generate additional upfront payments from Vitaros LatAm & APAC licensing rights. The company may also sell equity to Aspire Capital. We have updated our model with additional anticipated research and commercial expense, interest expense, COGS, and share dilution, as well as 50% risk-adjusted revenues for Fispemifene beginning in 2020," she added.

For an analyst ratings summary and ratings history on Apricus Biosciences click here. For more ratings news on Apricus Biosciences click here.

Shares of Apricus Biosciences closed at $1.61 yesterday.

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