Sagimet Biosciences Inc. (SGMT) Stock Analysis and Metrics

Sector: Healthcare Industry: Biotechnology CIK: 0001400118

P/B 1.69

P/E -3.50

P/S 0.00

Market Cap 201.85 Mn

ROIC (Qtr) -51.52

Div Yield % 0.00

Rev 1y % (Qtr) 0.00

Total Debt (Qtr) 115,000.00

Debt/Equity (Qtr) 0.00

About

Sagimet Biosciences Inc. (SGMT) is a clinical-stage biopharmaceutical company operating in the biotechnology industry. The company is renowned for its development of novel therapeutics, specifically fatty acid synthase (FASN) inhibitors, which target dysfunctional metabolic pathways in diseases resulting from the overproduction of the fatty acid, palmitate. Sagimet Biosciences Inc.'s main business activities revolve around the research, development, and clinical testing of FASN inhibitors. These activities are primarily focused on three key areas:...

Sagimet Biosciences Inc. (SGMT) is a clinical-stage biopharmaceutical company operating in the biotechnology industry. The company is renowned for its development of novel therapeutics, specifically fatty acid synthase (FASN) inhibitors, which target dysfunctional metabolic pathways in diseases resulting from the overproduction of the fatty acid, palmitate.

Sagimet Biosciences Inc.'s main business activities revolve around the research, development, and clinical testing of FASN inhibitors. These activities are primarily focused on three key areas: MASH (Metabolic Dysfunction-Associated Steatohepatitis), acne, and oncology. The company's operations span across various countries, with a significant presence in the United States and China.

The company generates revenue primarily through its lead drug candidate, denifanstat. This oral, once-daily pill is being developed for the treatment of MASH, a progressive liver disease characterized by the accumulation of excess fat in the liver, inflammation, and fibrosis. Denifanstat has shown promising results in clinical trials, with Sagimet Biosciences Inc. completing two Phase 2 clinical trials, FASCINATE-1 and FASCINATE-2, which achieved statistically significant results on primary and multiple secondary endpoints. The company is currently designing a pivotal Phase 3 program for denifanstat in MASH, which it plans to initiate in the second half of 2024.

In addition to MASH, denifanstat is also being developed for the treatment of moderate to severe acne vulgaris. Ascletis Pharma, a subsidiary of Ascletis Pharma, has completed a Phase 2 clinical trial and announced positive results, with denifanstat achieving statistically significant improvements in total lesion count and inflammatory lesion count. A Phase 3 clinical trial is currently underway in China.

Furthermore, Sagimet Biosciences Inc. is exploring the potential of denifanstat in combination with other classes of oncology drugs to treat specific subsets of solid tumors that are FASN-dependent. A Phase 1 clinical trial has been completed, and a Phase 3 registrational trial is currently underway in China in patients with recurrent glioblastoma multiforme.

Sagimet Biosciences Inc. holds a strong competitive position in the industry due to its unique mechanism of action that targets the three key drivers of MASH pathogenesis: steatosis, inflammation, and fibrosis. The company's FASN inhibitors have shown promising results in clinical trials, and its precision medicine approach using non-invasive tests (NITs) to identify patients who will benefit from denifanstat is a significant differentiator.

The company's customers include Ascletis Pharma, which has licensed the development and commercialization rights to denifanstat in Greater China.

The brand names and/or trade names of Sagimet Biosciences Inc.'s products and services include denifanstat and its application in MASH, acne, and oncology. These designations reflect the company's commitment to developing innovative therapeutic solutions for a range of medical conditions.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 32.50M provide 282.57x coverage of short-term debt 115000, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 128.40M provides 1116.53x coverage of total debt 115000, indicating robust asset backing and low credit risk.
Short-term investments of 84.20M provide solid 17.59x coverage of other current liabilities 4.79M, indicating strong liquidity.
Tangible assets of 128.40M provide robust 26.82x coverage of other current liabilities 4.79M, indicating strong asset backing.
Cash reserves of 32.50M provide robust 3.55x coverage of current liabilities 9.15M, indicating strong short-term solvency.

Cons

Operating cash flow of (44.84M) barely covers its investment activities of 48000, with a coverage ratio of -934.19, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of 48000 provide weak support for R&D spending of 46.54M, which is 0x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
The company's operating cash flow of (44.84M) shows concerning coverage of stock compensation expenses of 6.29M, with a -7.13 ratio indicating potential earnings quality issues.
Operating earnings of (57.67M) show weak coverage of depreciation charges of 151000, with a -381.93 ratio indicating high capital intensity and potential reinvestment needs.
Long-term investments of 8.81M represent a high 76.57x of fixed assets 115000, indicating potential overexposure to financial assets versus operational capabilities.

Peer Comparison

Companies in the Biotechnology

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SMMT	Summit Therapeutics Inc.	1,349.40 Bn	-1,464.17	0.00	0.01 Bn
2	ONC	BeOne Medicines Ltd.	437.43 Bn	6,381.20	87.97	1.90 Bn
3	VRTX	Vertex Pharmaceuticals Inc / Ma	116.09 Bn	31.59	9.90	1.83 Bn
4	REGN	Regeneron Pharmaceuticals, Inc.	78.10 Bn	17.06	5.48	2.71 Bn
5	ALNY	Alnylam Pharmaceuticals, Inc.	55.87 Bn	1,282.42	17.40	3.21 Bn
6	ARGX	Argenx Se	52.85 Bn	35.08	27,559.65	-
7	BNTC	Benitec Biopharma Inc.	41.75 Bn	-998.33	0.00	0.00 Bn
8	INSM	INSMED Inc	37.80 Bn	-31.93	84.56	0.74 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	1.24	12.31
EV to Cash from Ops.	-3.56	23.25
EV to Debt	1,388.47	738.44
EV to EBIT	-2.77	-9.16
EV to EBITDA	-2.49	6.95
EV to Free Cash Flow [EV/FCF]	-3.56	21.90
EV to Market Cap	0.79	65.67
EV to Revenue	0.00	227.32
Price to Book Value [P/B]	1.69	22.34
Price to Earnings [P/E]	-3.50	-11.77

Dividend Metrics

Metric	Value	Industry	Percentile
Dividend Coverage Ratio	0.00	-11.94
Dividend Payout Ratio %	0.00	0.16
Dividend per Basic Share	0.00	0.01
FCF Dividend Payout Ratio %	0.00	-0.14
Interest Coverage	0.00	841.00

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	0.00	-27.13
Cash and Equivalents Growth (1y) %	-57.81	734.65
Dividend Growth (1y) %	0.00	0.01
EBIAT Growth (1y) %	-53.72	-46.93
EBITDA Growth (1y) %	-40.78	-1.68
EBIT Growth (1y) %	-53.72	-56.45
EBT Growth (1y) %	-53.72	-12.70
EPS Growth (1y) %	-381.08	-28.31
FCF Growth (1y) %	-16.49	-31.90
Gross Profit Growth (1y) %	0.00	226.84

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.00	0.14
Cash Payout Ratio	0.00	0.00
Cash Ratio	3.55	3.85
Current Ratio	13.06	7.27
Debt to Equity Ratio	0.00	0.40
Interest Cover Ratio	0.00	841.00
Times Interest Earned	0.00	841.00

Profitability

Metric	Value	Industry	Percentile
EBITDA Margin %	0.00	-18,234.31
EBIT Margin %	0.00	-18,580.80
EBT Margin %	0.00	-19,488.74
Gross Margin %	0.00	-7.59
Net Profit Margin %	0.00	-19,439.22

Sagimet Biosciences Inc. (NASDAQ: SGMT)