NEW YORK (TheStreet) -- Apricus Biosciences (APRI) shares are up 4.12% to $1.77 in afternoon trading on Thursday after the drug maker announced that it has licensed the U.S. development and commercialization rights for Vitaros from Allergan (AGN).
Vitaros is a topical cream treatment for erectile dysfunction that could be a potential entrant into a U.S. erectile dysfunction market that is dominated by Pfizer's (PFE) ED pill Viagra.
Apricus will be responsible for all of the drug's development efforts in the U.S., though Allergan may elect to exercise a one time opt-in right to assume future marketing activities in the U.S. if the FDA accepts the drug's New Drug Application.
"We are pleased to announce this transaction for the return of the U.S. Vitaros rights to Apricus and we look forward to working with Allergan to transition the regulatory submission back within our organization," said Apricus CEO Richard Pascoe.
TheStreet Ratings team rates APRICUS BIOSCIENCES INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate APRICUS BIOSCIENCES INC (APRI) a SELL. This is driven by a few notable 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 deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 379.4% when compared to the same quarter one year ago, falling from $1.88 million to -$5.25 million.
- The gross profit margin for APRICUS BIOSCIENCES INC is currently extremely low, coming in at 6.06%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1135.28% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$8.61 million or 86.06% 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 share price of APRICUS BIOSCIENCES INC has not done very well: it is down 14.37% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- APRICUS BIOSCIENCES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, APRICUS BIOSCIENCES INC reported poor results of -$0.54 versus -$0.48 in the prior year. This year, the market expects an improvement in earnings (-$0.48 versus -$0.54).
- You can view the full analysis from the report here: APRI Ratings Report