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On Monday, Citizens JMP lowered the stock rating for Ready Capital Corp. (NYSE:RC) from ’Market Outperform’ to ’Market Perform’. The stock, currently trading at $5.01, is near its 52-week low and appears undervalued according to InvestingPro analysis, with a market capitalization of $843 million and a price-to-book ratio of 0.55. The shift in rating follows the announcement of positive VERIFY data, which met all endpoints, including the key secondary endpoint of phlebotomy rate, a crucial measure for European regulatory agencies. The successful results of the VERIFY study position rusfertide as the first treatment to demonstrate a statistically significant prospective benefit on symptoms. This is expected to significantly influence discussions with payors. Despite recent challenges, Ready Capital maintains a significant 14.43% dividend yield and has maintained dividend payments for nine consecutive years, as reported by InvestingPro.
The VERIFY data are anticipated to facilitate a New Drug Application (NDA) filing, which management has indicated could occur in the fourth quarter of 2025. Furthermore, the results have initiated a $25 million milestone payment to Protagonist Therapeutics (NASDAQ:PTGX) upon the completion of the clinical study report. Post-NDA filing, Protagonist has the option to terminate its profit-sharing agreement with Takeda and, in doing so, could receive a $400 million opt-out payment. Additional financial benefits include up to $950 million in further milestones, with $75 million due upon NDA approval, and tiered royalties ranging from 14% to 29% on worldwide net sales.
The announcement has effectively removed the uncertainty surrounding the VERIFY readout, shifting the focus to the upcoming ANTHEM-UC data expected later this month. The analyst noted that there is a market need for an active, safe, and easy-to-prescribe oral treatment option for inflammatory bowel disease (IBD), suggesting that icotrokinra could potentially meet this demand.
Today’s update from Citizens JMP reflects the potential for Ready Capital to capitalize on the recent advancements in its treatment options and the implications for its financial and strategic positioning in the pharmaceutical market. With a beta of 1.5 indicating higher market volatility, investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
In other recent news, Ready Capital Corp reported a significant earnings miss for the fourth quarter of 2024. The company posted a GAAP loss of $1.90 per share and a distributable earnings loss of $0.03 per share, both falling short of analyst expectations. Revenue from core operations decreased by 12% to $91.6 million, reflecting a challenging period for the company. Despite these results, Ready Capital has announced plans to originate $1-1.5 billion in commercial real estate loans in 2025, aiming for a 10% stabilized core return by the end of the year.
Additionally, Ready Capital has reduced its dividend to $0.125 per share and is preparing for an upcoming merger with UDF IV, expected to close in March. This merger is projected to add 17% to incremental earnings. Analysts from firms such as Piper Sandler and UBS have inquired about the company’s strategies to address current challenges and future debt maturities. Ready Capital’s management has emphasized strategic actions, including increased provisions for loan losses and a focus on non-core portfolio liquidation, to stabilize and improve financial performance.
Furthermore, the company’s small business lending operations achieved $1.2 billion in total small business lending for 2024, contributing positively to its earnings profile. Ready Capital remains focused on navigating market pressures and executing its recovery plan.
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