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Cipher Pharmaceuticals Inc (TSE:CPH)
:CPH

Cipher Pharmaceuticals (CPH) AI Stock Analysis

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Cipher Pharmaceuticals

(OTC:CPH)

Rating:71Outperform
Price Target:
C$14.00
▲(11.64%Upside)
Cipher Pharmaceuticals' overall score of 71 reflects strong financial performance with significant revenue growth and robust strategic initiatives. However, challenges such as declining profitability metrics and high valuation are notable concerns. The company's technical indicators suggest neutral market momentum.

Cipher Pharmaceuticals (CPH) vs. iShares MSCI Canada ETF (EWC)

Cipher Pharmaceuticals Business Overview & Revenue Model

Company DescriptionCipher Pharmaceuticals Inc. is a specialty pharmaceutical company focused on the acquisition, licensing, and commercialization of dermatology products. The company operates primarily in North America and specializes in bringing innovative and differentiated products to market through its established sales and marketing infrastructure.
How the Company Makes MoneyCipher Pharmaceuticals generates revenue primarily through the commercialization and distribution of specialty dermatology products. The company's revenue streams include product sales, licensing agreements, and royalties from partnerships with other pharmaceutical companies. Cipher's business model involves acquiring or in-licensing products that have potential for growth in the dermatology sector and leveraging its marketing capabilities to boost sales. The company also enters into strategic partnerships to expand its product offerings and market reach, which further contributes to its revenue generation.

Cipher Pharmaceuticals Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -13.04%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call presented a strong growth narrative driven by the Natroba acquisition and Canadian product portfolio, leading to significant revenue and EBITDA growth. However, this was somewhat offset by declines in licensing revenue, particularly from Absorica, and increased expenses. The company's strategic debt repayment and pursuit of growth opportunities provide a balanced outlook.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Total net revenue increased by 105% to $12 million in Q1 2025 compared to the same period in 2024, largely due to the acquisition of the Natroba business.
Natroba Business Performance
Natroba generated $6.7 million in revenue with a gross margin of approximately 87%, positioning the business well for upcoming warmer months.
Canadian Product Portfolio Growth
Canadian product revenue increased by 41% compared to the same quarter in the prior year, contributing to overall product revenue growth.
Adjusted EBITDA Increase
Adjusted EBITDA rose by 73% to $6.2 million due to the Natroba acquisition and growth in the Canadian product portfolio.
Debt Repayment
A repayment of $15 million was made on the revolving credit facility, reducing the outstanding debt to $25 million.
Negative Updates
Decline in Licensing Revenue
Licensing revenue decreased by 72% to $700,000 due to lower product shipments and increased generic competition in the US.
Absorica Revenue Decline
Licensing revenue from Absorica fell by 84% to $300,000, impacted by decreased product shipments and market share.
Increased SG&A Expenses
Selling, general, and administrative expenses increased by $3.5 million, partly due to one-time arbitration costs.
Company Guidance
During the first quarter of 2025, Cipher Pharmaceuticals reported total net revenue of $12 million, marking a 105% increase from the same period in 2024, largely due to the acquisition of the Natroba business. Natroba generated $6.7 million in revenue, achieving gross margins of $5.8 million or approximately 87% when excluding non-cash adjustments. The company's base business yielded $5.3 million in revenue, a 9% decline from the previous year, though Canadian product sales rose by 41%. Total adjusted EBITDA was $6.2 million, up by 73%, with a cash balance of $22 million and a reduced debt of $25 million after a $15 million repayment. The company highlighted its four-fold growth strategy for Natroba, including expansion in the US, a planned launch in Canada, global out-licensing, and acquiring complementary products.

Cipher Pharmaceuticals Financial Statement Overview

Summary
Cipher Pharmaceuticals demonstrates strong revenue growth and robust gross margins, positioning it well in the pharmaceuticals industry. However, declining net profit margins and ROE highlight potential challenges in maintaining profitability and operational efficiency. The balance sheet remains solid with manageable debt levels, but cash flow improvements are needed to sustain future growth.
Income Statement
72
Positive
Cipher Pharmaceuticals has shown a robust revenue growth from 2023 to 2024, increasing by 57.7%, which is a positive indicator of the company's market expansion and product demand. The gross profit margin is strong at 72.3% in 2024, indicating efficient cost management. However, the absence of EBIT in 2024 could suggest increased operating expenses or write-offs. Net profit margin decreased significantly from 96.3% in 2023 to 34.6% in 2024, which raises concerns about profitability sustainability.
Balance Sheet
80
Positive
The company maintains a healthy debt-to-equity ratio of 0.40 in 2024, reflecting prudent leverage levels. Return on Equity (ROE) saw a notable decrease to 11.3% in 2024 from 25.3% in 2023, indicating reduced efficiency in generating profits from shareholders' equity. The equity ratio is stable at 63.0%, showcasing a solid capital structure with a high proportion of equity financing.
Cash Flow
75
Positive
Operating cash flow has improved, with a 22.2% increase from 2023 to 2024, supporting operational stability. The free cash flow to net income ratio remains impressive at 1.69 in 2024, indicating strong cash conversion. However, free cash flow growth is moderate at 22.1%, suggesting potential constraints in cash generation compared to previous years.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue33.36M21.16M20.68M21.94M21.61M
Gross Profit24.10M17.09M16.68M18.26M18.55M
EBITDA11.87M11.53M12.04M13.66M13.40M
Net Income11.54M20.38M26.64M7.76M4.55M
Balance Sheet
Total Assets162.51M86.03M73.78M51.65M44.28M
Cash, Cash Equivalents and Short-Term Investments17.84M39.83M28.84M20.55M9.14M
Total Debt40.58M353.00K428.00K516.00K1.85M
Total Liabilities60.17M5.51M9.70M12.75M11.63M
Stockholders Equity102.34M80.52M64.08M38.90M32.64M
Cash Flow
Free Cash Flow19.50M15.98M10.49M13.81M10.93M
Operating Cash Flow19.55M16.00M10.57M13.81M11.69M
Investing Cash Flow-80.04M-144.00K-81.00K0.00-760.00K
Financing Cash Flow39.30M-5.24M-1.91M-2.47M-8.13M

Cipher Pharmaceuticals Technical Analysis

Technical Analysis Sentiment
Negative
Last Price12.54
Price Trends
50DMA
12.83
Negative
100DMA
12.55
Negative
200DMA
13.69
Negative
Market Momentum
MACD
<0.01
Positive
RSI
44.31
Neutral
STOCH
23.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CPH, the sentiment is Negative. The current price of 12.54 is below the 20-day moving average (MA) of 12.85, below the 50-day MA of 12.83, and below the 200-day MA of 13.69, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 44.31 is Neutral, neither overbought nor oversold. The STOCH value of 23.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CPH.

Cipher Pharmaceuticals Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSCPH
71
Outperform
C$321.31M24.979.69%84.83%-58.69%
TSOGI
71
Outperform
$246.35M17.684.76%26.93%
TSMDP
71
Outperform
C$102.26M24.695.27%-3.82%-50.36%
TSGUD
65
Neutral
C$580.82M54.101.41%12.21%
60
Neutral
HK$15.27B5.80-7.43%4.22%11.60%-21.06%
TSHLS
56
Neutral
C$151.16M-23.05%-3.73%32.70%
TSTH
49
Neutral
$149.44M
16.23%85.76%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CPH
Cipher Pharmaceuticals
12.86
4.69
57.41%
TSE:GUD
Knight Therapeutics
6.00
0.31
5.45%
TSE:TH
Theratechnologies
3.21
1.30
68.06%
TSE:OGI
OrganiGram Holdings
1.90
-0.27
-12.44%
TSE:HLS
HLS Therapeutics Inc
4.81
1.22
33.98%
TSE:MDP
Medexus Pharmaceuticals Inc
3.13
1.02
48.34%

Cipher Pharmaceuticals Corporate Events

Shareholder Meetings
Cipher Pharmaceuticals’ Shareholders Approve Key Resolutions at Annual Meeting
Positive
Jun 13, 2025

Cipher Pharmaceuticals announced the successful results of its annual and special meeting of shareholders, where all proposed matters were approved by a majority vote. Key approvals included the election of director nominees, the re-appointment of RSM Canada LLP as auditor, and the resolution concerning unallocated shares under the company’s share purchase plan. Approximately 50.9% of total shares were represented at the meeting, indicating strong shareholder engagement.

The most recent analyst rating on (TSE:CPH) stock is a Buy with a C$16.00 price target. To see the full list of analyst forecasts on Cipher Pharmaceuticals stock, see the TSE:CPH Stock Forecast page.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Cipher Pharmaceuticals Reports Strong Q1 2025 Results and Strategic Debt Repayment
Positive
May 8, 2025

Cipher Pharmaceuticals reported a significant financial performance in the first quarter of 2025, with total revenue increasing by 105% to $12.0 million compared to the previous year. The company’s Canadian product portfolio saw a 41% revenue increase, and Natroba™ sales contributed $6.7 million. The company also announced a $15 million debt repayment, reducing its revolving credit facility balance, and highlighted strategic moves such as the preferred status of Natroba™ in Illinois Medicaid and a share repurchase program, indicating a strong financial position and strategic growth opportunities.

Financial Disclosures
Cipher Pharmaceuticals to Announce Q1 2025 Financial Results
Neutral
May 2, 2025

Cipher Pharmaceuticals announced its financial results for the first quarter of 2025 will be released on May 8, 2025, followed by a conference call on May 9, 2025, to discuss the results and corporate developments. This announcement is significant for stakeholders as it provides insights into the company’s financial health and strategic direction, potentially impacting its market positioning and investor relations.

Product-Related AnnouncementsBusiness Operations and Strategy
Cipher Pharmaceuticals’ Natroba™ Gains Preferred Status in Illinois Medicaid
Positive
Apr 29, 2025

Cipher Pharmaceuticals announced that its product Natroba™ has been granted preferred drug status on Illinois’ Medicaid Preferred Drug Listing for the treatment of scabies and head lice, while its competitor, Permethrin 5%, has been downgraded. This decision is expected to influence prescribing habits, potentially benefiting Cipher’s market position. The company sees this as a significant growth opportunity and is in discussions with other states to expand Natroba’s preferred status, addressing the global issue of lice resistance to Permethrin.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025