Tiny Antibe Therapeutics (TSXV:ATE) may be set to shake up the massive NSAID market, says M Partners analyst Daniel Pearlstein.
In a research report to clients yesterday, Pearlstein initiated coverage of Antibe Therapeutics with a “Buy” rating and a one-year target of $1.30, implying a 160% return at the time of publication.
Pearlstein notes that sales of non-steroidal anti-inflammatory drugs (NSAIDs) topped $12-billion in 2010, led by household names such as Pfizer’s arthritis treatment Celebrex and Novartis’s Voltaren, which addresses much of the same market.
While popular in both generic and prescription forms, NSAIDs are not without issue, and their well-documented problems spell opportunity for Antibe, says the analyst. NSAIDs do provide relief for conditions such as arthritis, says Pearlstein, but they also can lead to gastrointestinal problems, including obstructions, perforation and ulcers. The analyst notes that recent reports show that 70% of chronic NSAID users have “significant” small intestinal damage and bleeding.
Antibes drug candidates, such as its lead ATB-346, however, incorporate hydrogen-sulfide releasing molecules that can reduce gastrointestinal damage. The analyst points out that the treatment has performed well in extensive pre-clinical trials and could soon gain the interest of big pharma because the company has composition of matter patents on all compounds and its IP protection extends all the way to 2030. Pearlstein believes Antibe is a natural acquisition target for large pharmaceutical companies including Abbot Labs, GlaxoSmithKline, and Amgen.
Pearstein believes Antibe’s management and board are another strong suit. He points to the company’s founder, Dr. John Wallace, who is the founder of French pharma NicOX S.A., and to Paladin Labs co-founder Jonathan Goodman, as two examples.
The M Partners analyst says near term catalyst for Antibe include Q1, 2015, when Phase 1 data is expected, and the following quarter when a Phase II clincial trail in osteoarthritis patients is expected to commence.
At press time, shares of Antibe Therapeutics were down 6% to $0.47.