Time To Exit This NASDAQ-Listed Pharmaceutical Stock – TFFP

Apr 13, 2022 12:00 AM PDT | Team Kalkine
Time To Exit This NASDAQ-Listed Pharmaceutical Stock – TFFP


TFF Pharmaceuticals, Inc.

TFF Pharmaceuticals, Inc. (NASDAQ: TFFP) is a biopharmaceutical firm in the early stages of development and commercialization that uses its patented Thin Film Freezing (TFF) technology platform to create and commercialize novel therapeutic solutions for pulmonary illnesses. Voriconazole Inhalation Powder (TFF VORI) and Tacrolimus Inhalation Powder are two of the most promising pharmaceutical prospects (TFF TAC). TFFP presently does not have a commercial product, but it is working with current partners to advance its initiatives and is in the process of forging new licence agreements with large pharmaceutical companies.

Why Should Investors Make An Exit?

  • Lackluster Financials: TFFP did not reported any commercial operations. Its net loss increased to USD 31.04 million in FY21 from USD 18.57 million in FY20.
  • Negative ROE: TFFP reported ROE of -81.6% compared to Industry Median of 1.3%.
  • Reliance on Patent Rights: TFFP was granted patent rights by the University of Texas at Austin (UT), which form the backbone of its entire company. The patent licence agreement requires TFFP to pay royalties and milestone payments and adhere to specific covenants and promises. Noncompliance with these conditions could lead to contract termination, jeopardising the company's operations.
  • Technical weakness: On the weekly chart, TFFP’s price is trading below the downward sloping trend line and facing the resistance of the same. Furthermore, on the daily chart the momentum oscillator RSI (14-period) is trading at ~43.59 level, trading in negative territory. On the weekly chart the prices are trading below the trend-following indicators 50- period SMA, which may act as a resistance level for the stock. An important support level for the stock, is placed at USD 5.64 while the key resistance level is placed at USD 7.55.

Valuation Methodology: EV/Sales Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation:

TFFP share price has declined 17.80% in the past six months and is currently leaning towards the lower band of the 52-week range of USD 5.09 to USD 13.25. . We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 5.41.

Considering the company's lackluster financials, negative ROE, current valuation and associated risks. we recommend a "Sell" rating on the stock at the closing price of USD 6.19, down 7.20% as of April 12, 2022.


Three-Year Technical Price Chart (April 12, 2022). Source: REFINITIV, Analysis by Kalkine Group

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.