Arecor Therapeutics PLC (AREC) AI Stock Analysis

• Market Cap: £21.33M
• Dividend Yield: N/A
• Average Volume (3M): 25.89K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.86
• Revenue Growth: 10.50%
• EPS Growth: -9.60%
• Country: UK
• Employees: 50
• Sector: Healthcare
• Sector Strength: 37
• Industry: Biotechnology
• EPS (TTM): -0.15
• Shares Outstanding: 37,756,600
• 10 Day Avg. Volume: 33,529
• 30 Day Avg. Volume: 25,894
• PEG Ratio: 0.25
• Price to Book (P/B): 3.46
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -2.03
• 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: £45.00
• Price Target Upside: -19.64% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 53 Neutral
• Price Target: 56.00p ▲(0.00%Upside)

Arecor Therapeutics PLC shows potential with strong technical momentum and positive corporate events, but ongoing financial challenges and an unattractive valuation score due to losses and lack of dividends weigh on the overall score. The company's strategic initiatives in R&D and executive confidence are promising, but caution is advised due to high volatility and financial instability typical of biotech firms.

Arecor Therapeutics PLC Business Overview & Revenue Model

Company Description

Arecor Therapeutics PLC, a biopharmaceutical company, focuses on developing products in diabetes and other indications. The company through its proprietary formulation technology platform, Arestat, developing a portfolio of proprietary products in diabetes and other indications, as well as working with pharmaceutical and biotechnology companies to deliver enhanced reformulations of therapeutic products. It is developing AT247, an ultra-rapid acting insulin for patients with Type I and Type II diabetics; and AT278, an ultra-concentrated rapid acting insulin formulation that has been designed to accelerate the absorption of insulin post injection. The company was founded in 2007 and is headquartered in Little Chesterford, the United Kingdom.

How the Company Makes Money

Arecor Therapeutics PLC generates revenue through multiple streams. The company earns money by developing its proprietary drug formulations and licensing them to pharmaceutical companies, which pays Arecor for the rights to use its advanced formulation technology. Additionally, Arecor engages in partnerships and collaborations with other pharmaceutical and biotechnology firms, receiving milestone payments and royalties based on the success and commercialization of the partnered products. These partnerships are crucial as they provide funding for research and development, which is a significant part of its business model. Furthermore, the company may also generate income from grants and government funding aimed at supporting innovative healthcare solutions.

Arecor Therapeutics PLC Financial Statement Overview

Summary

Arecor Therapeutics PLC shows significant revenue growth but faces challenges with negative net income and EBIT, indicative of high operational costs and R&D expenses typical for a biotech company. The declining gross profit margin and ongoing cash flow issues emphasize the struggle for financial stability.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.05M	4.57M	2.40M	1.16M	1.70M
Gross Profit	1.54M	4.57M	2.06M	1.16M	1.70M
EBITDA	-10.15M	-8.39M	-10.06M	-6.27M	-3.26M
Net Income	-10.24M	-8.55M	-9.26M	-6.17M	-2.75M
Balance Sheet
Total Assets	8.72M	15.38M	21.77M	20.92M	4.28M
Cash, Cash Equivalents and Short-Term Investments	3.26M	6.75M	12.81M	18.32M	2.90M
Total Debt	232.00K	338.00K	288.00K	231.00K	2.00M
Total Liabilities	3.37M	5.85M	4.31M	2.37M	3.51M
Stockholders Equity	5.35M	9.53M	17.45M	18.55M	773.79K
Cash Flow
Free Cash Flow	-9.18M	-5.99M	-11.13M	-5.52M	-1.91M
Operating Cash Flow	-9.15M	-5.84M	-10.78M	-5.45M	-1.86M
Investing Cash Flow	1.72M	6.52M	-7.99M	-68.00K	-49.32K
Financing Cash Flow	5.65M	-180.00K	5.16M	20.93M	1.77M

Arecor Therapeutics PLC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 56.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 56 is above the 20-day moving average (MA) of 50.00, above the 50-day MA of 45.93, and above the 200-day MA of 55.45, indicating a bullish trend. The MACD of 2.98 indicates Negative momentum. The RSI at 97.58 is Negative, neither overbought nor oversold. The STOCH value of 85.94 is Negative, 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	53 Neutral	£21.33M	―	-137.62%	―	10.50%	-9.60%
Sector *	51 Neutral	$7.30B	0.27	-62.71%	2.44%	15.02%	0.60%
IMM	―	£10.34M	―		―	―	―
OPTI	―	£11.62M	―	-20.90%	―	―	―
SAR	47 Neutral	£23.02M	―	-87.30%	―	―	71.17%
HEMO	―	£7.20M	―	-302.41%	―	―	―
TRX	67 Neutral	£26.36M	―	-2.91%	―	-5.33%	60.20%

Arecor Therapeutics PLC Corporate Events

Arecor Therapeutics Establishes Expert Advisory Board for Oral Peptide Delivery

Arecor Therapeutics has formed a new Scientific Advisory Board composed of world-renowned experts in oral drug delivery and peptide therapeutics. This board will provide crucial technical and strategic guidance as Arecor aims to develop a novel technology platform for the oral delivery of peptides, which could significantly improve bioavailability and address patient needs in markets like diabetes and obesity. The initiative underscores Arecor’s commitment to advancing oral peptide delivery, a challenge that has persisted for decades, with the potential to enhance patient compliance and reduce healthcare burdens.

Arecor Therapeutics Grants New Share Options to Drive Growth

Arecor Therapeutics plc announced the grant of 295,000 options under its Long Term Incentive Plan and 239,600 options under its All Employee Share Ownership Plan. These options are part of the company’s strategy to incentivize its leadership and employees, with performance conditions tied to time and share price outperformance. This move is likely to strengthen employee commitment and align their interests with the company’s long-term growth objectives.

Arecor Therapeutics Passes All AGM Resolutions, Strengthening Governance

Arecor Therapeutics plc announced the successful passage of all resolutions at its Annual General Meeting, with one resolution deemed redundant and bypassed. This outcome reinforces the company’s governance and operational strategies, potentially strengthening its position in the biopharmaceutical industry and providing reassurance to stakeholders.

Arecor Therapeutics Announces Board Change with Dr. Alan Smith’s Retirement

Arecor Therapeutics plc announced the retirement of Dr. Alan E Smith from his role as a Non-Executive Director after over 17 years of service. Dr. Smith’s scientific and strategic guidance has been pivotal in advancing Arecor from its early stages to a clinical-stage company. His departure marks a significant change in the board, but the company remains confident in its future success as it continues to develop its promising pipeline of therapeutics.

Arecor Executives Show Confidence with Share Purchases

Arecor Therapeutics plc announced that key executives, including Chair Andrew Richards, CEO Sarah Howell, and CSO Jan Jezek, have purchased ordinary shares in the company. This move signifies confidence in the company’s future prospects and may positively influence stakeholder perceptions, potentially strengthening Arecor’s position in the biopharmaceutical industry.

Arecor Partners with Skye Bioscience to Enhance Obesity Treatment

Arecor Therapeutics has partnered with Skye Bioscience to develop an enhanced formulation of nimacimab, a CB1 inhibitor for obesity treatment, using Arecor’s Arestat™ technology. This collaboration underscores Arecor’s strategic focus on innovative medicine development and offers significant potential for future licensing opportunities, while addressing unmet needs in metabolic disease treatment.

Arecor Chair Increases Stake with Share Purchase

Arecor Therapeutics plc announced that Andrew Richards, the Chair of the company, has purchased 35,000 ordinary shares at £0.4125 each, increasing his total beneficial interest to 286,611 shares, which represents 0.76% of the total voting rights. This transaction reflects a significant vote of confidence in the company’s future prospects and may positively influence stakeholder perceptions and market positioning.

Arecor Therapeutics Releases 2024 Annual Report and Announces AGM

Arecor Therapeutics plc has released its Annual Report and Accounts for the year ending December 31, 2024, and announced its Annual General Meeting scheduled for June 2, 2025. This announcement provides shareholders with updated financial information and strategic insights, potentially impacting investor confidence and the company’s market positioning.