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Specialty Pharma's Q2/21 Results 'Fundamentally Ahead of Expectations'
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A ROTH Capital Partners report noted that Assertio Therapeutics' business model is starting to gain traction.

In an Aug. 20 research note, ROTH Capital Partners analyst Scott Henry reported Assertio Therapeutics Inc.'s (ASRT:NASDAQ) Q2/21 results.

"Fundamentally, we found the quarter at the high end of expectations based largely on revenues," Henry wrote.

The pharma's total Q2/21 revenue was $25.4 million ($25.4M) compared to ROTH's estimate of $20.4M. The beat was due to sales of four products. Indocin generated $13.1M versus ROTH's $10.5M forecast; Zipsor, $2.6 versus $2M; Cambia, $6.1M versus $6M; and Sprix, $2.9M versus $1.5M.

Spending during Q2/21 amounted to $30.2M, nearly double ROTH's $15.7M projection but was due to payment of a one-time litigation cost of $11.3M.

Assertio's Q2/21 earnings per share (EPS) was a loss of $0.32, which was adjusted to account for the reverse stock split the company executed earlier in the year. The EPS was much higher than ROTH's estimated loss of $0.08. Henry pointed that the EPS loss would have been about $0.06 had it not been for the $11.3 legal payment.

In light of its strong Q2/21 earnings, Assertio raised its full year 2021 net sales guidance to $91–96M from $85–92M. It also revised its EBITDA guidance to $34–37M from $34–40M.

"We viewed this tightening of the [EBITDA] range as a notable positive given that the prior guidance did not factor in the $11.3M legal charge taken in Q2/21," Henry wrote.

About the quarter overall, the analyst commented, "We view Q2/21, combined with strong guidance, as a sign that the business model is starting to gain traction."

To further gain momentum, Henry noted, Assertio should focus on two areas. One is acquisitions, of companies and/or products, the latter of which will likely be the "key upside lever for shares going forward," he wrote.

The second is capitalizing on the company's "hub model," Henry added, in which prescriptions get funneled through a central location. This allows for better control of the entire pharmacy process, ultimately resulting in more prescriptions filled and reimbursement captured more easily.

ROTH has a Buy rating and a $1.55 per share target price on Assertio Therapeutics, which compares to its current share price of about $0.89.

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from ROTH Capital Partners, Assertio Therapeutics, Inc., Company Note, August 20, 2021

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

An Associated Person owns debt or equity securities of Assertio Therapeutics, Inc..
Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has received compensation for investment banking services from Assertio Therapeutics, Inc..
ROTH makes a market in shares of Assertio Therapeutics, Inc. and as such, buys and sells from customers on a principal basis.
A Research Analyst and/or a member of the Analyst's household own(s) debt or equity securities of Assertio Therapeutics, Inc. stock.
Shares of Assertio Therapeutics, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.

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