What happened to Botanix (ASX:BOT) and why are investors sweating

From A$0.53 to A$0.118 Botanix Shows How Fast Biotech Narratives Turn

Botanix (ASX:BOT) is a clear example of how quickly sentiment can shift in Australian biotech. The share price has been highly volatile, reaching highs of A$0.53 before falling to A$0.118 today, even after the launch of Sofdra.

For context, Sofdra is Botanix’s FDA approved treatment for primary axillary hyperhidrosis, which is simply excessive underarm sweating. On paper, that is a meaningful milestone, and the market initially priced in a strong commercial ramp.

But the story has moved fast. Investors were expecting higher early revenue growth and stronger GTN yields. GTN, or gross to net, is the portion of headline sales the company actually keeps after rebates, discounts, and other deductions. So far, those rebates and reductions have been larger than the market expected, which has weighed on the revenue being recognised.

In our view, this is the key issue to watch from here. It is not just whether prescriptions grow, but whether Botanix can improve the economics of each sale and lift the amount of revenue that ultimately flows through to the company.

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What is Sofdra

Before we dive into the financials, it is worth quickly stepping back for newer investors coming across Botanix.

The company’s lead product is Sofdra, a topical gel designed to reduce excessive underarm sweating. It works by binding to M3 receptors in the sweat gland and blocking the signals that tell the gland to produce sweat. Botanix also highlights that the product is rapidly metabolised in the body, which supports its safety and tolerability positioning.

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Commercially, the early demand metrics have been strong, but the revenue mix is still being shaped by launch incentives. Botanix has reported gross revenue of A$93.5 million, but net revenue of A$22.2 million after rebates, discounts, and other deductions. That is a meaningful reduction, but it is also common in early-stage pharma launches where access and adoption are prioritised.

The strategy appears to be clear. Botanix is using aggressive discounting early to build the user base, which helps explain the strong uptake so far. The company has reported 62.5k prescriptions, with refill rates around 2.5x the industry standard. That is encouraging, but investors should keep one key question in mind. As the company lifts its gross to net yield and the product becomes more expensive for customers, will refill behaviour hold up at the same level?

That will be an important test of whether Sofdra is winning on product value, not just on early pricing.

Looking at the most recent quarter, Botanix shipped 23,351 prescriptions, up 24% from Q1 FY26. Net revenue was A$9.2 million, up 28% quarter on quarter. Management’s target is to lift
gross to net yields toward 30% to 40%, which would mean Botanix keeps more revenue from each prescription over time, assuming demand remains resilient as pricing normalises.

What’s the path for BOT to crossing the commercial chasm

To help investors frame what profitability could look like, we also ran some simple back-of-the-envelope maths.

Using a 28% gross to net yield, and using this quarter’s operating cash outflow of around A$20 million as a rough proxy for quarterly overheads, Botanix would need roughly 49,000 prescriptions per quarter to cover that cost base.

That is about 2x the current quarterly volume. It is not a forecast, but it does give a practical benchmark for what scale might be required for Botanix to reach a break-even quarter under these assumptions.

While we think this is doable, investors need to acknowledge this will take time, so the key with this stock is patience.

The Investors Takeaway for BOT

For investors, the core consideration with Botanix is patience. The near term debate is not just whether prescriptions grow, but whether gross to net yields improve over time, and whether demand stays resilient as pricing normalises.

What we will be watching closely is the interaction between those two levers. If GTN yields lift meaningfully, but prescriptions stall because out of pocket costs rise, the revenue ramp can look very different to what the headline prescription count suggests. On the other hand, if Botanix can improve GTN yields while keeping refill behaviour and new starts strong, the operating model begins to look much more scalable.

The company’s financial position looks solid today, but investors should expect cash burn to remain elevated for a period, particularly as the sales team expands and the commercial engine is built out. That is normal for this stage, but it does mean quarterly cash flow can remain volatile even if top line metrics are improving.

In terms of valuation context, three analysts have published a Buy recommendation with a target of A$0.88 per share. Based on comparable research and a more conservative view of near term execution risk, we think a more reasonable valuation range is A$0.44 to A$0.52 per share, assuming growth remains strong and GTN yields trend higher over time.