Clinical-stage biopharmaceutical company Timber Pharmaceuticals, Inc. (TMBR - Get Rating) develops and commercializes various treatments for orphan dermatologic diseases.

On August 11, 2022, John Koconis, TMBR’s Chairman and CEO, said, “During the second quarter, Timber achieved several significant milestones for our lead asset, TMB-001. These include the launch and enrollment of the first patients for the pivotal Phase 3 ASCEND study, and the receipt of Breakthrough Therapy designation from the FDA in May and Fast Track designation in April.”

However, on August 29, 2022, TMBR announced that it had received a deficiency letter from NYSE American LLC stating that the company’s common stock had been trading at a low-price level for quite some time. TMBR denied any significant effect of this letter on its listing.

TMBR has lost 27.4% over the past month to close the last trading session at $0.06. It has lost 84% year-to-date and 91.9% over the past year.

Here is what could shape TMBR’s performance in the near term:

Weak Bottom Line and Declining Cash Balance

TMBR’s loss from operations came in at $9.40 million for the quarter that ended June 30, 2022, worsening 216.9% year-over-year. Its net loss came in at $9.50 million, worsening 220.1% year-over-year, while its loss per share came in at $0.15, worsening 87.5% year-over-year.

Moreover, TMBR’s cash came in at $8.27 million for the period ended June 30, 2022, compared to $16.81 million for the period ended December 31, 2021.

Stretched Valuation

TMBR’s forward EV/Sales of 43.56x is 1,014.5% higher than the industry average of 3.91x. Its forward Price/Sales of 111.23x is 2,442.3% higher than the industry average of 4.38x.

Poor Profitability

TMBR’s trailing-12-month ROCE, ROTC, and ROTA of negative 887.36%, 238.18%, and 185.36%, compared with the industry averages of negative 38.90%, 21.59%, and 29.64%, respectively.

In addition, its trailing-12-month CAPEX/Sales of 1.27% is 72.2% lower than the industry average of 4.57%, while its trailing-12-month Asset Turnover ratio of 0.06% is 82.3% lower than the industry average of 0.35%.

POWR Ratings Reflect Bleak Prospects

TMBR has an overall rating of F, equating to a Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. TMBR has an F grade for Quality, consistent with its lower-than-industry profitability ratios.

The stock has a D grade for Momentum. It is trading below the 50-day moving average of $0.10 and the 200-day moving average of $0.24.

In the 495-stock Biotech industry, TMBR is ranked #480.

Click here for the additional POWR Ratings for TMBR (Growth, Value, Stability, and Sentiment).

View all the top stocks in the Biotech industry here.

Bottom Line

TMBR’s deteriorating bottom line and cash balance are concerning. Moreover, it closed the last trading session at its 52-week low of $0.06. Given the stock’s poor fundamentals and regulatory threats, TMBR might be best avoided this fall.

How Does Timber Pharmaceuticals, Inc. (TMBR) Stack Up Against Its Peers?

While TMBR has an overall POWR Rating of F, one might consider looking at its industry peers, Vertex Pharmaceuticals Incorporated (VRTX - Get Rating), Gilead Sciences, Inc. (GILD - Get Rating), and Biogen Inc. (BIIB - Get Rating), which have an overall A (Strong Buy) rating.

TMBR shares were trading at $0.06 per share on Tuesday afternoon, down $0.00 (-3.11%). Year-to-date, TMBR has declined -84.21%, versus a -17.99% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...

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