Breaking Down Sol-Gel Technologies Ltd. (SLGL) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments in the pharmaceutical sector, particularly in companies like Sol-Gel Technologies Ltd. (SLGL)? With a net loss of $27.2 million, or $1.01 per basic and diluted share, reported for the year 2023, compared to a net loss of $14.9 million in 2022, understanding the financial drivers is crucial. Did you know that Sol-Gel's revenue in 2023 was $1.6 million, a decrease from $3.9 million in 2022, mainly due to a milestone payment from Galderma in 2022? As they push forward with Phase 3 trials for SGT-610 and manage a cash runway extending into the second half of 2025, let's dive into the key financial insights that can help you make informed decisions.

Sol-Gel Technologies Ltd. (SLGL) Revenue Analysis

Understanding Sol-Gel Technologies Ltd.'s (SLGL) financial health requires a detailed look at its revenue streams. A comprehensive analysis includes examining where the company's revenue comes from, how it has grown (or declined) over time, and the specific contributions of its various business activities.

Sol-Gel Technologies Ltd. is a dermatology company focused on developing and commercializing topical dermatological pharmaceuticals. Key aspects of their revenue streams include:

• Products: TWYNEO® and EPSOLAY® are two approved large-category dermatology products.
• Licensing Agreements: Revenue is generated through licensing agreements with companies like Galderma, Searchlight Pharma, and Padagis. These agreements often involve milestone payments, royalties, and upfront payments.
• Geographic Expansion: Recent agreements to commercialize TWYNEO® and EPSOLAY® in regions like Europe, South Africa, and South Korea are expected to contribute to future revenue.

Recent financial results and corporate updates provide insights into the company's revenue performance:

• Third Quarter 2024: Total revenue was $5.4 million, primarily from licensing revenues. This is a significant increase compared to $0.2 million for the same period in 2023.
• Second Quarter 2024: Revenue was $5.43 million, surpassing estimates.
• Full Year 2023: Total revenue was $1.554 million, a decrease compared to $3.883 million in 2022 and $31.272 million in 2021. The decrease is attributed to a milestone payment from Galderma in 2022 related to FDA approval of Epsolay.

The year-over-year revenue growth rate has seen considerable fluctuation:

• 2023: Revenue decreased by 59.98% compared to 2022.
• Third Quarter 2024: Showed substantial growth, with revenue up by US$5.15 million from Q3 2023.
• Revenue Growth (TTM): +869.93%.

Future revenue growth is anticipated from several factors:

• New Agreements: The new agreement with Padagis is expected to enhance Sol-Gel's cash position by approximately $6 million through quarterly payments and royalties.
• Territorial Expansion: Launches of TWYNEO and EPSOLAY in new territories are projected to provide an annual royalty revenue stream, starting with approximately $1 million to $2 million in 2026 and growing to approximately $10 million by 2030.
• Analyst Estimates: Revenue is forecast to grow 28% per annum on average during the next 3 years.

A breakdown of revenue contribution by business segments reveals the increasing importance of licensing agreements. For instance, in the third quarter of 2024, licensing revenue was the primary contributor, marking a shift from previous years when product sales or collaboration revenues may have been more significant.

Significant changes in revenue streams include:

• Shift to Licensing: A greater reliance on licensing agreements for revenue, as seen in the Q3 2024 results.
• New Partnerships: Agreements with Beimei Pharma to commercialize TWYNEO® in China, Hong Kong, Macau, Taiwan, and Israel, potentially generating up to $15 million.
• Generic Drug Rights: Selling rights in the Abbreviated New Drug Application (ANDA) drug product generic to Zoryve® Cream (roflumilast cream 0.3%).

Here's a table summarizing Sol-Gel Technologies Ltd.'s annual revenue:

For more insights into Sol-Gel Technologies Ltd.'s mission, vision, and core values, you can visit Mission Statement, Vision, & Core Values of Sol-Gel Technologies Ltd. (SLGL).

Overall, while 2023 saw a revenue decrease, recent results and strategic agreements indicate a potential for significant revenue growth in the coming years, driven by licensing, geographic expansion, and new product developments. The company's cash runway is expected to extend into the first quarter of 2026 due to recent transactions and cost-cutting efforts.

Sol-Gel Technologies Ltd. (SLGL) Profitability Metrics

Analyzing Sol-Gel Technologies Ltd.'s (SLGL) profitability involves examining several key metrics to assess the company's financial health and operational efficiency. As of the latest data, here's a breakdown:

Gross Profit Margin:

• The gross profit margin for Sol-Gel Technologies Ltd. (SLGL) is reported at -43.31%.
• This negative margin indicates that the cost of goods or services sold exceeds the revenue generated, suggesting potential issues with production costs or pricing strategies.

Operating Profit Margin:

• The operating profit margin stands at -96.71%.
• This signifies a substantial loss from the company's core operations, taking into account operating expenses such as administrative and research & development costs.

Net Profit Margin:

• The net profit margin is -81.75%.
• This negative percentage reveals that the company is not generating profit after all expenses, including taxes and interest, are accounted for.

Trends in Profitability Over Time:

• Reviewing historical data, Sol-Gel Technologies Ltd. (SLGL) has struggled with profitability over the past few years.
• The company needs to address its cost structure and revenue generation to improve these margins.

Comparison with Industry Averages:

• When compared to industry averages, Sol-Gel Technologies Ltd.'s (SLGL) profitability ratios are significantly lower.
• This suggests that the company is underperforming relative to its peers, which could be due to various factors such as higher operating costs, lower sales volume, or pricing pressures.

Analysis of Operational Efficiency:

• Cost Management: Effective cost management is crucial for improving profitability. The high operating and net losses suggest that Sol-Gel Technologies Ltd. (SLGL) needs to implement strategies to reduce expenses and streamline operations.
• Gross Margin Trends: Monitoring gross margin trends can provide insights into the efficiency of production and pricing. A declining gross margin may indicate rising costs or the need to adjust pricing strategies.

Here is a table summarizing Sol-Gel Technologies Ltd.'s (SLGL) key profitability metrics:

For more insights into the company's values, see Mission Statement, Vision, & Core Values of Sol-Gel Technologies Ltd. (SLGL).

Sol-Gel Technologies Ltd. (SLGL) Debt vs. Equity Structure

Understanding how Sol-Gel Technologies Ltd. (SLGL) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and recent financing activities. By examining these elements, we can gain insights into the company's financial stability and its approach to balancing debt and equity funding. For more insights, you might be interested in reading about Mission Statement, Vision, & Core Values of Sol-Gel Technologies Ltd. (SLGL).

An overview of Sol-Gel Technologies Ltd.'s debt levels reveals the extent to which the company relies on borrowing to fund its activities. This includes both short-term debt, which is due within a year, and long-term debt, which extends beyond a year. As of the fiscal year 2024, Sol-Gel Technologies Ltd. reported:

• Short-term debt: Specific figures for short-term debt were not available in the provided search results.
• Long-term debt: Specific figures for long-term debt were not available in the provided search results.

The debt-to-equity ratio is a key metric for assessing a company's financial leverage. It indicates the proportion of debt and equity used to finance the company's assets. A high ratio suggests that the company relies more on debt, which can increase financial risk. Unfortunately, a specific debt-to-equity ratio for Sol-Gel Technologies Ltd. (SLGL) for fiscal year 2024 was not found in the provided search results. Generally, comparing this ratio to industry standards provides context on whether Sol-Gel Technologies Ltd.'s leverage is typical or unusual within its sector.

Recent debt issuances, credit ratings, or refinancing activities can significantly impact a company's financial health. These actions can provide insight into how the company is managing its debt obligations and its ability to access capital. Based on the search results, there is no specific information available regarding recent debt issuances, credit ratings, or refinancing activities for Sol-Gel Technologies Ltd. (SLGL) during the fiscal year 2024.

Balancing debt financing and equity funding is a strategic decision for companies. While debt can provide capital for growth, it also introduces financial risk through interest payments and the obligation to repay the principal. Equity funding, on the other hand, does not require repayment but dilutes ownership. Without specific data on Sol-Gel Technologies Ltd.’s strategy in 2024, it's challenging to assess the effectiveness of their approach.

Sol-Gel Technologies Ltd. (SLGL) Liquidity and Solvency

Assessing Sol-Gel Technologies Ltd. (SLGL)'s financial health involves a thorough examination of its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations.

Here's an analysis of key liquidity metrics for Sol-Gel Technologies Ltd. (SLGL):

• Current Ratio: The current ratio, a key indicator of liquidity, measures a company's ability to cover its short-term liabilities with its short-term assets. Sol-Gel Technologies Ltd. (SLGL)'s current ratio has fluctuated throughout 2024. The most recently reported current ratio as of September 30, 2024, was 5.81. Earlier in the year, the current ratio was 6.89 in Q1, 7.36 in Q2. At the end of 2023, the current ratio was 9.10.
• Quick Ratio: The quick ratio is a more conservative measure of liquidity than the current ratio, as it excludes inventories from current assets.

The trend in Sol-Gel Technologies Ltd. (SLGL)'s current ratio indicates some variability in its short-term liquidity position throughout the year.

Working Capital Trends:

Working capital, the difference between a company's current assets and current liabilities, is a measure of its short-term financial health. Analysis of working capital trends provides insights into the company's efficiency in managing its short-term assets and liabilities.

Cash Flow Statements Overview:

An overview of cash flow statements reveals the trends in operating, investing, and financing activities.

Key observations from cash flow activities include:

• Operating Cash Flow: Cash flow from operating activities reflects the cash generated or used by the company's core business operations. For the six months ended June 30, 2024, the cash from operating activities was -$17.02 million.

Liquidity Strengths:

As of December 31, 2024, Sol-Gel Technologies Ltd. (SLGL) had $19.5 million in cash, cash equivalents, and deposits and $4.4 million in marketable securities, for a total balance of $23.9 million.

As of March 31, 2025, Sol-Gel Technologies Ltd. (SLGL) had $16.9 million in cash, cash equivalents, and deposits and no marketable securities for a total balance of $16.9 million.

Sol-Gel Technologies Ltd. (SLGL) also entered into a product purchase agreement with a subsidiary of Mayne Pharma Group Limited for the sale and exclusive license of the U.S. rights to EPSOLAY and TWYNEO. Sol-Gel will receive a total of $16 million in two installments: $10 million in the second quarter of 2025 and $6 million in the fourth quarter of 2025, which is expected to extend the Company's cash runway into the first quarter of 2027.

Learn more about Sol-Gel Technologies Ltd. (SLGL)'s financial health: Breaking Down Sol-Gel Technologies Ltd. (SLGL) Financial Health: Key Insights for Investors

Sol-Gel Technologies Ltd. (SLGL) Valuation Analysis

Determining whether Sol-Gel Technologies Ltd. (SLGL) is overvalued or undervalued requires examining several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios (if applicable), and analyst consensus.

As of April 2025, up-to-date specific valuation ratios for Sol-Gel Technologies Ltd. (SLGL) may not be available. However, we can analyze the types of data points that would be crucial in such an assessment. For illustrative purposes, consider the following:

• Price-to-Earnings (P/E) Ratio: This ratio compares the company's stock price to its earnings per share (EPS). A high P/E ratio might suggest overvaluation, while a low P/E ratio could indicate undervaluation. However, it’s essential to compare SLGL’s P/E ratio to its industry peers and historical P/E ratios. For example, if SLGL has a P/E ratio of 25 while its industry average is 15, it might be considered relatively overvalued.
• Price-to-Book (P/B) Ratio: This ratio compares a company's market capitalization to its book value of equity. A lower P/B ratio may suggest the stock is undervalued. For instance, a P/B ratio of 1.2 might be attractive compared to an industry average of 2.5.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares a company's enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure than P/E, especially for companies with significant debt. An EV/EBITDA of 10 might be considered fair, but should be benchmarked against competitors.

Analyzing stock price trends is also vital. Here's what to look for:

• Stock Price Trends: Reviewing the stock price movement over the past 12 months (or longer) can reveal important trends. A consistently rising stock price might indicate strong investor confidence, while a declining price could signal concerns. Consider whether recent news or events have significantly impacted the stock price.

If Sol-Gel Technologies Ltd. (SLGL) distributes dividends, the following metrics are relevant:

• Dividend Yield and Payout Ratios: The dividend yield (annual dividend per share divided by the stock price) indicates the return on investment from dividends alone. The payout ratio (percentage of earnings paid out as dividends) shows the sustainability of the dividend. A high yield with a low payout ratio is generally more sustainable.

Finally, it's important to consider analyst opinions:

• Analyst Consensus: Check the consensus among financial analysts covering the stock (buy, hold, or sell recommendations). A strong buy consensus suggests analysts believe the stock is undervalued, while a sell consensus indicates the opposite. However, it's crucial to understand the reasoning behind these recommendations.

To consolidate, a summary table of valuation metrics can be helpful:

For further insights, consider reading Breaking Down Sol-Gel Technologies Ltd. (SLGL) Financial Health: Key Insights for Investors.

Sol-Gel Technologies Ltd. (SLGL) Risk Factors

Investing in Sol-Gel Technologies Ltd. (SLGL) involves navigating a landscape of potential risks that could impact its financial health. These risks stem from both internal vulnerabilities and external pressures, requiring investors to stay informed and adaptable. For a deeper dive into investor profiles and company dynamics, check out Exploring Sol-Gel Technologies Ltd. (SLGL) Investor Profile: Who’s Buying and Why?.

Here’s an overview of the key risks:

• Industry Competition: The pharmaceutical industry is fiercely competitive. Sol-Gel Technologies faces challenges from established players and innovative newcomers, all vying for market share. This competition can pressure pricing and profitability.
• Regulatory Changes: Pharmaceutical companies operate in a heavily regulated environment. Changes in regulations, whether related to drug approvals, manufacturing standards, or pricing, can significantly affect Sol-Gel Technologies' operations and financial performance.
• Market Conditions: Economic downturns or shifts in healthcare spending can impact the demand for Sol-Gel Technologies' products. Unfavorable market conditions could lead to reduced sales and revenues.

Operational, financial, and strategic risks are crucial aspects to consider. These are often highlighted in the company's earnings reports and filings.

• Operational Risks: These include challenges related to manufacturing, supply chain disruptions, and quality control issues. Any hiccup in these areas can lead to delays, increased costs, and damage to the company's reputation.
• Financial Risks: Sol-Gel Technologies must manage its cash flow, debt levels, and capital expenditures effectively. Failure to do so can result in financial instability.
• Strategic Risks: Strategic risks involve decisions related to research and development, market expansion, and partnerships. Poor strategic choices can lead to wasted resources and missed opportunities.

Mitigation strategies are essential for managing these risks. While specific plans can vary, common strategies include:

• Diversification: Expanding the product portfolio can reduce reliance on any single product or market.
• Cost Control: Implementing measures to control costs and improve efficiency can enhance profitability.
• Compliance: Adhering to regulatory requirements and maintaining high ethical standards can minimize legal and reputational risks.

By understanding and monitoring these risk factors, investors can make more informed decisions about Sol-Gel Technologies Ltd. (SLGL). Staying abreast of company updates and industry trends is crucial for navigating the complexities of pharmaceutical investments.

Sol-Gel Technologies Ltd. (SLGL) Growth Opportunities

Sol-Gel Technologies Ltd. (SLGL) faces a dynamic landscape with several growth drivers and strategic initiatives shaping its future. A critical aspect of analyzing SLGL's future involves understanding its pipeline and market positioning.

Key growth drivers for Sol-Gel Technologies Ltd. (SLGL) include:

• Product Innovations: Sol-Gel Technologies Ltd. (SLGL)'s ability to innovate and expand its product offerings is crucial for growth. For instance, the company's focus on innovative dermatology solutions positions it to capture emerging market needs.
• Market Expansion: Geographic expansion and penetration into new market segments can significantly boost revenue.
• Strategic Partnerships: Collaborations with other companies can provide access to new technologies, markets, and resources.

To provide a clearer picture, let's consider potential future revenue growth projections and earnings estimates. Note that these figures are speculative and based on available data and market analysis. It's important to consult official company reports and financial analyses for the most accurate information.

Analyzing Sol-Gel Technologies Ltd.'s strategic initiatives and partnerships provides insights into its growth strategy. These collaborations can enhance Sol-Gel Technologies Ltd.'s market reach and technological capabilities.

Here's a look at some potential competitive advantages that could position Sol-Gel Technologies Ltd. for growth:

• Proprietary Technology: Unique and patented technologies can create a strong competitive edge.
• Established Market Presence: A strong existing presence in key markets provides a solid foundation for further expansion.
• Strong Pipeline: A robust pipeline of new products and therapies signals future growth potential.

For additional insights into the company's direction, refer to Mission Statement, Vision, & Core Values of Sol-Gel Technologies Ltd. (SLGL).