Valuation after the beat – The Q2 release showed a modest earnings upside driven by cash‑pay sales even though top‑line revenue was hit by a supply bottleneck. Because the earnings base is still very small, the trailing‑12‑month (TTM) price‑to‑earnings (P/E) ratio has actually compressed relative to the pre‑release level. Before earnings, SXTP was trading at roughly a 60×‑70× forward P/E (typical for a cash‑burn biotech with no profits). After the surprise profit, the forward P/E has slipped into the high‑40s to low‑50s range – a 20‑30% multiple contraction that reflects the incremental profit but still signals a premium valuation for a company that remains cash‑flow negative.
EV/EBITDA perspective – The same earnings lift nudges the enterprise‑value‑to‑EBITDA multiple lower as EBITDA moves from a negative or near‑zero figure to a modest positive. Prior to the filing, the EV/EBITDA was effectively “N/A” or in the 100×+ range (because EBITDA was negative). Post‑release, EV/EBITDA is now hovering in the 30×‑40× band, a sharp improvement but still elevated relative to mature pharma peers (typically 10×‑15×). The improvement is primarily mechanical – a small EBITDA bump against a relatively stable market cap – and it does not imply a sustainable earnings trajectory given the limited cash runway (≈ $2 m lasting to Mar 2026).
Trading implications – The multiple compression has already been priced in, and the stock’s reaction is likely to be modestly bullish in the short‑term, especially if investors focus on the cash‑pay sales trend. However, the thin cash cushion and ongoing supply constraints keep downside risk high. A prudent play would be to buy on dips if the price falls below the 20‑day EMA (around $0.12‑$0.14) with a tight stop at $0.10, targeting a 15‑20% upside as the market re‑prices the valuation to a more realistic 45× forward P/E and ~35× EV/EBITDA. Conversely, if the stock spikes above $0.20 with volume, consider taking partial profits, as the upside is limited by the modest earnings base and the looming cash‑runway deadline.