A Look at Graybug Vision’s Risk Factors

Graybug Vision (GRAY) is a biotech company that develops transformational therapies for the treatment of retinal and optic nerve illnesses.

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Let’s take a look at the eye disease drug maker’s latest financial performance and risk factors. (See Graybug Vision stock charts on TipRanks)

Graybug Vision’s Financial Performance

Graybug Vision reported a net loss of $7.7 million in the second quarter versus a net loss of $5.9 million in the year-ago quarter.

General and administrative expenses jumped 157% to $3.6 million, while research and development expenses decreased 8.7% to $4.2 million on a year-over-year basis.

Graybug Vision Health Risk Factors

According to the new Tipranks Risk Factors tool, Graybug Vision’s main risk category is Tech & Innovation, which accounts for 36% of the total 69 risks identified.

Since December, Graybug Vision has updated its risk profile to introduce one new risk factor under the Production category.

The new risk is related to Sunitinib maleate (GB 102 and GB 103) – the company’s intravitreal (IVT) injections of sunitinib for the treatment of wet age-related macular degeneration (wet AMD).

Let us discuss the new risk factor in more detail.

Under the Supply Chain sub-category, the company said, “We will require a partner to fund, in whole or in part, any further clinical trials of GB-102 for wet AMD. Without such a partnership, further development of GB-102 for wet AMD or diabetic macular edema, or DME, or of GB-103 for diabetic retinopathy, is unlikely.”

Though the company plans to invest in the preclinical development of GB-102 for wet AMD, the company currently lacks the financial resources to conduct additional clinical trials on the treatment. As a result, the company is looking for a partner to support future trials of GB-102 formulations in wet-AMD.

Unfortunately, Graybug Vision emphasizes that failing to locate a partner in a timely manner will have a significant negative impact on the company’s operations. The company also informed investors that the future trials of GB-102 for DME and GB-103 for diabetic retinopathy would be put on hold until collaboration is established.

Furthermore, the overall sector average for the Tech & Innovation risk category is 25.3%, lower than the average risks in that category for Graybug Vision, which is 36.2%.

Analyst’s Take

Following the Q2 earnings announcement, Needham analyst Serge Belanger reiterated a Hold rating on the stock.

Belanger prefers to remain on the sidelines “due to a lack of near-term value-driving catalysts and continued uncertainty in the future of the GB-102 program.”

Overall, the stock has a Hold consensus rating based on 2 Holds.

As for price targets, the average GRAY price target is $4.00, reflecting 12-month upside potential of 3.1% from current levels.