NEW YORK (TheStreet) -- Shares of Zogenix, Inc. (ZGNX - Get Report) are retreating today, down -11.27% to $1.89, after Purdue Pharma Inc.'s tamper-resistant competitor to Zogenix's powerful pain pill has received priority review from U.S. regulators, Purdue said, Bloomberg reports.
The FDA will expedite the application process for Purdue's hydrocodone tablet, the closely held drugmaker said in a statement today. The review is expected to take six months instead of the standard 10 months, Purdue said.
The chronic pain medication is hard for abusers to crush and snort or inject, making it a threat to Zongenix's Zohydro ER, which doesn't have abuse-deterrent features, Bloomberg noted.
TheStreet Ratings team rates ZOGENIX INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ZOGENIX INC (ZGNX) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is very high at 11.94 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, ZGNX maintains a poor quick ratio of 0.88, which illustrates the inability to avoid short-term cash problems.
- Net operating cash flow has significantly decreased to -$22.82 million or 51.41% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Pharmaceuticals industry. The net income increased by 0.6% when compared to the same quarter one year prior, going from -$21.06 million to -$20.93 million.
- ZOGENIX INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ZOGENIX INC reported poor results of -$0.72 versus -$0.64 in the prior year. This year, the market expects an improvement in earnings (-$0.64 versus -$0.72).
- Compared to other companies in the Pharmaceuticals industry and the overall market, ZOGENIX INC's return on equity significantly trails that of both the industry average and the S&P 500.You can view the full analysis from the report here: ZGNX Ratings Report