Avadel Pharmaceuticals Plc (NASDAQ: AVDL)

Sector: Healthcare Industry: Drug Manufacturers - Specialty & Generic CIK: 0001012477
Market Cap 2.10 Bn
P/B 21.38
P/E -7,552.84
P/S 8.45
ROIC (Qtr) 1.27
Div Yield % 0.00
Rev 1y % (Qtr) 54.86
Total Debt (Qtr) 37.38 Mn
Debt/Equity (Qtr) 0.38

About

Avadel Pharmaceuticals plc, a biopharmaceutical company with the ticker symbol AVDL, operates in the rare disease treatment industry. Its primary business activities involve the development and commercialization of proprietary drug delivery technologies. The company's flagship product, LUMRYZ, is an extended-release formulation of sodium oxybate indicated for the treatment of cataplexy or excessive daytime sleepiness (EDS) in adults with narcolepsy. Avadel's business model is built on the development and commercialization of its unique drug delivery...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 34.54M provides robust 0.92x coverage of total debt 37.38M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 79.81M provide 107.86x coverage of short-term debt 740000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 182.61M provides 4.89x coverage of total debt 37.38M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 34.35M exceeds capital expenditure of 190000 by 180.81x, indicating strong organic growth funding capability.
  • Operating cash flow of 34.54M fully covers other non-current liabilities 2.10M by 16.46x, showing strong long-term stability.

Bear case

  • Investment activities of 10.54M provide weak support for R&D spending of 39.89M, which is 0.26x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 79.81M provide limited coverage of acquisition spending of (15M), which is -5.32x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 34.54M shows concerning coverage of stock compensation expenses of 18.55M, with a 1.86 ratio indicating potential earnings quality issues.
  • Operating cash flow of 34.54M provides minimal -11.60x coverage of tax expenses of (2.98M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of 6.45M show weak coverage of depreciation charges of 3.68M, with a 1.76 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Drug Manufacturers - Specialty & Generic
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ZTS Zoetis Inc. 56.15 Bn 21.18 5.98 7.27 Bn
2 TAK Takeda Pharmaceutical Co Ltd 48.92 Bn 221.13 1.66 36.24 Bn
3 HLN Haleon plc 46.13 Bn 25.59 3.29 -
4 TEVA Teva Pharmaceutical Industries Ltd 35.27 Bn 49.54 2.10 17.07 Bn
5 UTHR UNITED THERAPEUTICS Corp 21.76 Bn 17.11 6.95 0.00 Bn
6 VTRS Viatris Inc 14.87 Bn -4.03 1.05 14.44 Bn
7 NBIX Neurocrine Biosciences Inc 14.08 Bn 32.91 5.25 0.43 Bn
8 ELAN Elanco Animal Health Inc 11.64 Bn 323.29 2.54 4.32 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 10.44 24.98
EV to Cash from Ops. EV/CFO 60.26 -85.40
EV to Debt EV to Debt 55.69 265.88
EV to EBIT EV/EBIT 322.55 -32.65
EV to EBITDA EV/EBITDA 253.90 -29.50
EV to Free Cash Flow [EV/FCF] EV/FCF 60.60 -32.62
EV to Market Cap EV to Market Cap 0.99 -10.98
EV to Revenue EV/Rev 8.38 -700.14
Price to Book Value [P/B] P/B 21.38 27.22
Price to Earnings [P/E] P/E -7,552.84 -122.96
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.34
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.81
Dividend per Basic Share Div per Share (Qtr) 0.00 0.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.08
Interest Coverage Int. cover (Qtr) 0.66 -38.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.00 -157.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 179.24 44,776.25
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.81
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 100.89 24.45
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 113.22 18.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 110.32 37.66
EBT Growth (1y) % EBT 1y % (Qtr) 95.54 108.18
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 52.88
FCF Growth (1y) % FCF 1y % (Qtr) 141.48 -54.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 85.73 25.28
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.25 0.50
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 1.28 2.10
Current Ratio Curr Ratio (Qtr) 2.76 3.92
Debt to Equity Ratio Debt/Equity (Qtr) 0.38 -1.11
Interest Cover Ratio Int Coverage (Qtr) 0.66 -38.10
Times Interest Earned Times Interest Earned (Qtr) 0.66 -38.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 4.10 -62,432.09
EBIT Margin % EBIT Margin % (Qtr) 2.60 -63,260.88
EBT Margin % EBT Margin % (Qtr) -1.31 -66,726.96
Gross Margin % Gross Margin % (Qtr) 94.90 8,332.72
Net Profit Margin % Net Margin % (Qtr) -0.10 -66,728.37