Antibe Therapeutics has loads of upside, says Echelon Wealth

Echelon Wealth Partners analyst Douglas Loe is staying bullish on clinical stage drug developer Antibe Therapeutics (Antibe Therapeutics Stock Quote, Chart TSXV:ATE), reiterating his “Speculative Buy” rating and $1.40 target price in an update to clients on Tuesday.

Toronto-based Antibe provided on Tuesday an updated timeline for its seminal 360-patient Phase II knee osteoarthritis pain trial testing its lead hydrogen sulfide-releasing naproxen derivative ATB-346, saying that data is on the horizon near the end of the third quarter of this year, an event that Loe takes as a positive for the stock.

“The update is positive though not providing us with any new information as such, but rather confirmed that all study details are still consistent with our current model projections and on timelines to completing patient enrolment (probably sometime in July 2019) and then completing two-week follow-up on all enrolled subjects by, say, end-of-August 2019, reporting data to capital markets before end-of-FQ220 (CQ319),” writes Loe.

The analyst says that he is also encouraged to hear that Antibe’s orthopedic/dental regenerative medicine division Citagenix continues to perform well, with US-based sales growing at or above 62 per cent annually as in previous quarters.

“Accordingly, we believe based on that commentary alone that Citagenix continues to create value through top-line growth that we believe could be recognized by future partners or acquirers,” says Loe.

“Our core investment thesis, specifically on ATB-346 but more broadly on Antibe’s suite of hydrogen sulfide-releasing small-molecule analogs, is unchanged and we remain confident that positive data in FQ220 from the aforementioned 360-patient two-week placebo-controlled knee osteoarthritis pain trial could establish ATB-346 as a credible and safer alternative analgesic to parent drug naproxen, for which quarterly sales under innovator Bayer’s stewardship continue to be strong worldwide,” he said.

Loe thinks Antibe will generate total revenue in 2019 of $9.2 million and EBITDA of negative $7.4 million, respectively, and total revenue in 2020 of $9.7 million and EBITDA of negative $8.4 million, respectively. His $1.40 target represented a projected return of 337 per cent at the time of publication.

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