Arecor Therapeutics PLC (AREC) AI Stock Analysis

• Market Cap: £30.39M
• Dividend Yield: N/A
• Average Volume (3M): 40.10K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.92
• Revenue Growth: 3.31%
• EPS Growth: 21.91%
• Country: UK
• Employees: 50
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.07
• Shares Outstanding: 37,756,600
• 10 Day Avg. Volume: 67,644
• 30 Day Avg. Volume: 40,099
• PEG Ratio: -0.22
• Price to Book (P/B): 4.59
• Price to Sales (P/S): 4.86
• P/FCF Ratio: -2.68
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: 76.00p ▼(-5.00% Downside)

Arecor Therapeutics' score is driven by positive corporate events, including strategic partnerships and IP expansion, which bolster its market position. However, financial performance challenges, such as ongoing losses and cash flow issues, weigh heavily on the overall score. Technical analysis and valuation present a neutral outlook, reflecting the typical risks and opportunities in the biotech sector.

Positive Factors

Revenue Growth

The company's consistent revenue growth indicates strong market demand and successful product adoption, supporting its long-term expansion strategy.

Proprietary Technology

Arecor's proprietary technology enhances drug formulations, providing a competitive edge in drug efficacy and stability, crucial for long-term partnerships and market position.

Strategic Partnerships

Strategic collaborations provide funding and market access, crucial for R&D and commercialization, ensuring sustainable growth and innovation.

Negative Factors

Negative Cash Flow

Ongoing negative cash flow highlights sustainability concerns, as continuous cash burn without profitability can strain financial resources and limit operational flexibility.

Operational Challenges

Persistent operational losses indicate challenges in achieving profitability, which can hinder long-term financial health and require strategic adjustments.

Declining Gross Profit Margins

Declining margins suggest rising costs or pricing pressures, which could impact profitability and require efficiency improvements to sustain long-term growth.

Arecor Therapeutics PLC Business Overview & Revenue Model

Company Description

Arecor Therapeutics PLC (AREC) is a biopharmaceutical company specializing in the development of innovative therapeutic solutions that enhance the performance of existing medicines. The company focuses primarily on the diabetes and biopharmaceutical markets, leveraging its proprietary formulation technology to create improved formulations of protein-based drugs. Arecor's core offerings include enhanced insulin products and other therapeutic proteins that aim to improve patient outcomes and treatment adherence.

How the Company Makes Money

Arecor Therapeutics generates revenue primarily through partnerships and collaborations with larger pharmaceutical companies, which often involve licensing agreements for its proprietary technology and products. The company may also receive milestone payments and royalties based on the commercial performance of these partnered products. In addition, Arecor may engage in research and development (R&D) contracts that provide funding during the development phase of its therapeutics. Furthermore, the company may explore opportunities for direct sales of its own developed products, should they receive regulatory approval and enter the market.

Arecor Therapeutics PLC Financial Statement Overview

Summary

Arecor Therapeutics PLC is experiencing revenue growth but faces significant operational challenges, including negative net income and declining gross profit margins. The balance sheet shows a strong equity position but with a concerning debt-to-equity ratio and shrinking asset base. Cash flow statements highlight heavy cash burn and sustainability concerns typical for early-stage biotech firms.

Income Statement

Arecor Therapeutics PLC has shown significant revenue growth over the years, with a notable increase from 2022 to 2023. However, the company consistently reports negative net income and EBIT, which indicates operational challenges in maintaining profitability. Gross profit margin has significantly declined in 2023 from previous levels due to increasing costs. The negative EBIT and EBITDA margins highlight the ongoing struggle to generate positive operating income, characteristic of early-stage biotech firms focusing on R&D.

Balance Sheet

The balance sheet reveals a strong equity position, with a significant portion of the total assets funded by stockholders' equity, reflected in the equity ratio. However, the company has a concerning debt-to-equity ratio and a shrinking asset base, which could pose risks if cash reserves continue to deplete without achieving profitability. Despite this, low debt levels suggest manageable leverage.

Cash Flow

Cash flow statements show negative operating and free cash flows, emphasizing heavy cash burn typical for biotech companies at this stage. While the company raised capital through financing activities, the continuous negative free cash flow growth rate flags sustainability concerns if the trend persists. The operating cash flow to net income ratio highlights a challenging conversion of revenue into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.06M	5.05M	4.57M	2.40M	1.16M	1.70M
Gross Profit	-344.00K	1.54M	4.57M	2.40M	1.16M	1.70M
EBITDA	-8.02M	-10.15M	-8.39M	-10.06M	-6.27M	-3.26M
Net Income	-8.10M	-10.24M	-8.55M	-9.26M	-6.17M	-2.75M
Balance Sheet
Total Assets	5.25M	8.72M	15.38M	21.77M	20.92M	4.28M
Cash, Cash Equivalents and Short-Term Investments	1.89M	3.26M	6.75M	12.81M	18.32M	2.90M
Total Debt	173.00K	232.00K	338.00K	288.00K	231.00K	2.00M
Total Liabilities	2.39M	3.37M	5.85M	4.31M	2.37M	3.51M
Stockholders Equity	2.86M	5.35M	9.53M	17.45M	18.55M	773.79K
Cash Flow
Free Cash Flow	-6.20M	-9.18M	-5.99M	-11.13M	-5.52M	-1.91M
Operating Cash Flow	-6.09M	-9.15M	-5.84M	-10.78M	-5.45M	-1.86M
Investing Cash Flow	1.00K	1.72M	6.52M	-7.99M	-68.00K	-49.32K
Financing Cash Flow	5.64M	5.65M	-180.00K	5.16M	20.93M	1.77M

Arecor Therapeutics PLC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 80.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:AREC, the sentiment is Positive. The current price of 80 is above the 20-day moving average (MA) of 76.72, above the 50-day MA of 74.71, and above the 200-day MA of 58.40, indicating a bullish trend. The MACD of 1.83 indicates Negative momentum. The RSI at 70.27 is Negative, neither overbought nor oversold. The STOCH value of 48.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:AREC.

Arecor Therapeutics PLC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AREC	56 Neutral	£30.39M	-3.64	-204.29%	―	3.31%	21.91%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
TRX	49 Neutral	£5.16M	-4.90	-5.41%	―	-20.31%	-19.35%
SAR	47 Neutral	£22.44M	-4.82	-202.14%	―	―	23.76%

Arecor Therapeutics PLC Corporate Events

Arecor Therapeutics Expands IP Portfolio with New Patents for Diabetes Innovations

Arecor Therapeutics has strengthened its intellectual property (IP) portfolio with new patents for its lead product, AT278, and its oral peptide delivery technology. The US and European patents for AT278, an ultra-concentrated and ultra-rapid acting insulin, enhance its potential for integration with automated insulin delivery systems. Additionally, a new patent application for improving oral bioavailability of peptides has been filed, addressing a significant barrier in developing oral peptide therapies. These advancements reinforce Arecor’s position in the biopharmaceutical industry, particularly in the diabetes and cardiometabolic disease sectors, and demonstrate its commitment to innovation and IP protection.

Arecor Therapeutics Strengthens Board with Key Appointments

Arecor Therapeutics plc has announced significant changes to its Board, appointing Simon Ormiston as a Non-Executive Director and Chair of the Audit & Risk Committee, and elevating David Ellam, the Chief Financial Officer, to an Executive Director role. These changes are part of a strategic plan to strengthen the company’s governance and support its growth ambitions in the life sciences sector, particularly as it pursues strategic collaborations and monetization agreements.

Arecor Partners with Sequel for Advanced Insulin Delivery, Secures $11M Funding

Arecor Therapeutics has entered a co-development agreement with Sequel Med Tech to advance its ultra-concentrated insulin, AT278, in combination with Sequel’s advanced insulin delivery system. This partnership aims to address unmet needs in diabetes management and represents a strategic milestone for Arecor, enhancing its market positioning and extending its cash runway to 2027. Additionally, Arecor has secured up to $11 million in non-dilutive funding through a royalty financing agreement with Ligand Pharmaceuticals, which will support the development of AT278 and strengthen its financial stability.

Arecor Therapeutics Advances Diabetes and Obesity Drug Development with Strategic Partnerships

Arecor Therapeutics plc reported its interim results for the first half of 2025, highlighting significant progress in its diabetes and obesity drug development portfolios. The company received positive FDA feedback for its AT278 insulin product and signed a co-development agreement with Sequel Med Tech for Phase 2 activities, extending its cash runway to 2027. The company also made strides in its oral peptide delivery platform, aiming to improve patient accessibility and outcomes in the growing peptide therapeutics market. Financially, Arecor maintained steady revenue, reduced losses, and secured a royalty financing agreement with Ligand Pharmaceuticals, bolstering its financial position.

Arecor Therapeutics to Announce Interim Results

Arecor Therapeutics plc announced it will release its interim results for the first half of 2025 on 25 September. The announcement will be followed by a webcast hosted by the company’s CEO and CFO for analysts and institutional investors, highlighting the company’s ongoing commitment to transparency and engagement with stakeholders. This release is significant as it provides insights into the company’s financial health and strategic direction, potentially impacting its market positioning and investor confidence.