Maxim Group downgraded Agile Therapeutics (NASDAQ:AGRX) to “hold” from “buy” and removed its price target, citing a financing overhang. The stock closed at 16 cents on April 7.
Analyst Naz Rahman writes that Agile ended the fourth quarter of 2021 with $19.1-million in cash and is burning more than $16-million a quarter, and is working to address its capital constraints in addition to regaining compliance with NASDAQ.
Agile is a women’s healthcare company that launched Twirla, a weekly birth control patch, in December 2020 amid the pandemic.
“While Twirla is seeing prescription momentum, the financing overhang remains,” Mr. Rahman said, adding that capital still needs to be raised to continue to drive the Twirla launch. Meanwhile, there have been reimbursement headwinds, he noted.
The company is holding a special meeting of stockholders on April 21 to obtain approval for a reverse stock split prior to a financing.
“Fundamentally, our views of Twirla as a differentiated product with significant opportunity in the women’s health category remain unchanged, and the company has a solid management team that has overcome challenges in the past, including getting through not one, but two, complete response letters about Twirla. Bottom line: the company needs to recapitalize to continue to drive the Twirla story,” Mr. Rahman said.