Biotechnology firm Humacyte’s (HUMA) shares have declined since the company presented its fourth-quarter and full-year 2024 results. The company achieved a significant milestone with the FDA’s endorsement and subsequent market introduction of Symvess, a biologic for the treatment of extremity vascular trauma. Yet, despite this progress, shares dipped to a record low on Friday. The company’s financials showed no revenue for 2024 and research and development costs totaling $88.6 million, rising from $76.6 million in the prior year. These expenses reflect the expansion of R&D efforts and clinical trials, partially contributing to the net loss of $148.7 million for the year. However, analysts are bullish on Humacyte’s prospects, forecasting substantial share price growth over the next 12 months.
Preparing to Go To Market
Humacyte is a biotechnology firm developing universally implantable bioengineered human tissues and organ systems. The company manufactures acellular tissues that target various medical conditions and chronic diseases. Currently, its leading candidates, a portfolio of Acellular Tissue Engineered Vessels (ATEVs), are in advanced clinical trials for vascular applications like trauma repair and AV access for hemodialysis. The initial ATEV product for vascular trauma is under FDA Priority Review, indicating its potential impact on treatment practices. Further projects involve coronary artery bypass grafts, pediatric heart surgery, and type 1 diabetes. Notably, Humacyte’s 6mm ATEV has received the FDA’s Regenerative Medicine Advanced Therapy and Fast Track designations, highlighting its potential to improve patient outcomes. The urgent need for ATEVs in arterial repair has been endorsed by the U.S. Secretary of Defense, who has given them priority designation for vascular trauma treatment.
The company announced a significant achievement with the FDA’s approval of Symvess, a biologic product designed for the treatment of extremity vascular trauma. This approval is expected to open new possibilities in vascular surgery. Despite potentially negative news coverage of the approval, early market reception has been positive, with 34 hospitals already initiating the Value Analysis Committee (VAC) approval process to incorporate Symvess into their treatment protocols. The commercial launch is underway, with initial shipments reaching Level 1 trauma centers just weeks after FDA approval.
The company’s financial performance for the fourth quarter and full year of 2024 revealed no revenue generation, with research and development expenses slightly decreasing quarter-over-quarter but increasing annually due to expanded initiatives and FDA reviews. General and administrative expenses increased both quarterly and yearly due to preparations for a product launch. A notable shift occurred in other net income, primarily due to the non-cash remeasurement of a contingent earnout liability linked to a previous merger, resulting in a lower net loss compared to the prior quarter and year. The annual net loss increased, primarily due to the same non-cash remeasurement and rising operating expenses. As of year-end, the company held $95.3 million in cash and equivalents, with additional funds raised through public offerings in early 2025.
Analysts are Bullish
Analysts covering Humacyte have mostly been bullish on its prospects. For instance, BTIG’s Ryan Zimmerman reiterated a Buy rating on the stock with a revised price target of $8 (down from $10), noting an increased share count following the company’s recent equity offering, which also bolstered its pro-forma cash balance to $141.9 million. Zimmerman attributes his positive outlook to several factors, including Humacyte’s early commercial traction with its product, Symvess, as evidenced by the initiation of the VAC process in approximately 34 hospitals, indicating a promising market acceptance.
Humacyte is rated a Strong Buy overall, based on the recent recommendations of five analysts. The average price target for HUMA stock is $14.00, which represents a potential upside of 614.29% from current levels.
