Osmotica Pharmaceuticals plc (OSMT) stock announced the definitive purchase and sale agreement with Alora Pharmaceuticals, LLC on June 25, 2021, after which the OSMT stock price saw a push of 38.88%  in the pre-market trading session to reach $3.93 a share as of this writing. The stock was even bullish in the previous trading session and went up by 1.43% at closing. Let’s check out more about Osmotica stock.

Agreement with Alora Pharmaceuticals:

According to the purchase and sale agreement of Osmotica Pharmaceuticals with Alora Pharmaceuticals, Osmotica’s portfolio of legacy products and its manufacturing facility in Georgia, Marietta will be acquired by Alora for an amount up to $170 million. Alora will give $110 million as an upfront cash payment to Osmotica with the potential of additional milestone’s $60 million payments.

RVL Pharmaceuticals business that has UPNEEQ® as its flagship product and mainly focused on ophthalmology and aesthetics will be retained by OSMT stock. Moreover, Osmotica will also retain the development of arbaclofen extended-release (“ER”) tablets that are used in the treatment of  Multiple Sclerosis (“MS”) spasticity.

Financial Performance in First Quarter 2021:

Back in the previous month, the OSMT stock did announce the first quarter of 2021 financial results according to which total revenues decreased more than half to drop at  $23.9 million as compared to $48.6 million in the same tenure of the previous year.

The net loss suffered by OSMT stock recorded more than tripled to reach $9.6 million in the recently reported quarter as compared to $3.1 million net loss in the same period of the prior year.

Adjusted EBITDA loss of Osmotica stock was 5.8 million while the previous year adjusted EBITDA for the same quarter was $11.1 million.

Expenses in first Quarter 2021:

Osmotica stock spent $18.9 million in selling, general and administrative expenses in the first three months of 2021 which represents those expenses were reduced as compared to $21.2 million in the first quarter of 2020.

Research and development expenses shrank to  $3.3 million in the last reported quarter from  $5.7 million in the first quarter of 2020.

Balance Sheet:

OSMT stock had cash and cash equivalents of $109.2 million and $50.0 million borrowing availability by the end of March 2021 along with $219.8 million debt.

Conclusion:

Investors are responding positively to the purchase and sale agreement announced by Osmotica stock today as it is bullish as far as market sentiment is concerned. The earnings results were significantly low as compared to the previous year’s same quarter results. Investors need to be cautious before adding this stock to their portfolio.