In a research update on Monday, Echelon Wealth Partners analyst Douglas Loe reiterated his “Speculative Buy” rating and $1.40 target price for clinical stage drug developer Antibe Therapeutics (Antibe Therapeutics Stock Quote, Chart TSXV:ATE), which announced that it had gained Health Canada approval to proceed with the second part of its Phase 2B dose-ranging efficacy study for its lead drug candidate, ATB-346, a hydrogen sulfide-releasing derivative of naproxen.
Antibe’s announcement came on Monday, with CEO Dan Legault calling it “an exciting time” for Antibe. “A positive outcome in this Phase 2B study will validate the effectiveness of ATB-346 in reducing pain and will be a breakthrough for patients and physicians,” writes Legault in the press release. “Furthermore, it will unlock significant value for Antibe as we advance global partnering discussions and deepen our understanding of the ideal development path for ATB-346 and our other pipeline drug candidates.”
Loe says that he’s encouraged by the news as it shows that the trial is poised to begin enrolment right away and perhaps by the end of the month, earlier than he had previously assumed.
The analyst says that Antibe has sufficient cash to fund its Phase 2B program for ATB-346 but that driving it to completion could require supplemental sources of capital. But overall, Loe says that he remains “highly positive” concerning Antibe’s hydrogen sulfide-releasing chemistry for modifying NSAIDs like naproxen to confer pain relief without the gastrointestinal side effects common to the drug class.
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“As before, our [valuation model] assumes that ATB-346 can perform well in future Phase III knee osteoarthritis pain studies (we described expectations for Phase III study design in our initiation report), and that pain-mitigation data from the pending 360-patient 14-day placebo-controlled Phase IIb study will be sufficiently positive to justify advancing into such pivotal trials,” says Loe.
“On other milestones, we expect Antibe to report final metabolite characterization data from its completed 24-patient Phase I trial, also testing 150-mg-to-250-mg daily dosing, sometime in the next month or two,” he says.
Loe is expecting a 2019 EBITDA loss of $7.4 million on revenue of $9.2 million and a 2020 EBITDA loss of $8.4 million on a top line of $9.7 million. His $1.40 target price represents a projected return of 318 per cent at the time of publication.