Investment Thesis
Cocrystal Pharma exhibits severe financial distress with collapsing revenue (-69.3% YoY), massive operating losses (-$6.5M), and negative free cash flow despite holding $7.7M in cash. The company's long-term debt of $49.9M far exceeds stockholders' equity, creating unsustainable leverage that threatens viability without significant operational turnaround or capital injection.
Strengths
- Maintains adequate liquidity with 5.78x current ratio and $7.7M cash on hand
- Positive gross margin of 100.4% indicates viable product economics when revenue materializes
- 13 Form 4 insider filings suggest management engagement, though activity level does not offset fundamental concerns
Risks
- Revenue collapse of 69.3% YoY indicates failed clinical trials, loss of partnerships, or failed commercialization
- Debt-to-equity ratio of 6.51x with long-term debt of $49.9M versus equity of $7.6M indicates bankruptcy risk within 12-18 months without turnaround
- Negative operating cash flow of -$6.5M and free cash flow margin of -321.2% means cash burn will deplete reserves within approximately 14 months at current burn rate
- Pharmaceutical sector typically requires years to achieve profitability; current trajectory unsustainable
Key Metrics to Watch
- Quarterly revenue trend and pipeline progress announcements
- Monthly cash burn rate and runway to profitability or financing event
- Debt covenant compliance and refinancing requirements
Financial Metrics
Revenue
2.0M
Net Income
-6.4M
EPS (Diluted)
$-0.61
Free Cash Flow
-6.5M
Total Assets
10.4M
Cash
7.7M
Profitability Ratios
Gross Margin
100.4%
Operating Margin
-324.6%
Net Margin
-318.0%
ROE
-83.5%
ROA
-61.3%
FCF Margin
-321.2%
Balance Sheet & Liquidity
Current Ratio
5.78x
Quick Ratio
4.64x
Debt/Equity
6.51x
Debt/Assets
26.6%
Interest Coverage
N/A
Long-term Debt
49.9M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-22T18:04:11.661651 |
Data as of: 2025-09-30 |
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