Antibe Therapeutics (Antibe Therapeutics Stock Quote, Chart, News TSXV:ATE) has performed well both over the past year and during the current market downturn but there’s more where that came from, according to Echelon Wealth Partners analyst Douglas Loe, who called the stock a Top Pick in his latest update to clients on Thursday.
Canadian clinical-stage drug developer Antibe has as its lead clinical asset the hydrogen sulfide-releasing naproxen analog ATB-346, currently focused on knee osteoarthritis as its initial pain market. The company also has the ketoprofen-based ATB-352 and aspirin-based ATB-340 in preclinical testing.
Antibe currently has a Phase II trial for ATB-346 underway, with the last patient randomized in late February, with Loe expecting efficacy data to become available before the end of April, representing a key valuation inflection point, Loe said.
“Our attention is squarely focused on ATB-346 and imminent data from the aforementioned 360-patient multi-arm placebo-controlled Phase II knee osteoarthritis pain trial. The trial is testing ATB-346’s pain-mitigating activity at three separate doses –150-mg, 200-mg & 250-mg once-daily – all below the 550-mg twice-daily dosing at which naproxen is conventionally indicating for mitigating joint pain. That ATB-346 will confer naproxen-like analgesia at far lower doses is clearly a risk factor in our investment thesis that forthcoming Phase II data will clearly address,” Loe wrote.
The analyst noted that while stocks across the board experienced major price drops over the January to March 20 period, Antibe was a notable outlier. ATE did experience a sizeable drop in early March but it quickly rebounded, ending the first quarter up 36 per cent.
Since Loe gave ATE Top Pick status back in early July of last year, the stock has returned 82 per cent.
With the update, Loe has reiterated his “Speculative Buy” rating and $1.40 per share target for ATE, which at press time represented a projected 12-month return of 150 per cent.
For fiscal 2020, Loe thinks Antibe will generate total revenue of $10.0 million and an EBITDA loss of $8.5 million.
Antibe reported its last earnings on February 25 where its fiscal Q3 2020 interim financials included a cash balance of $6.6 million at the end of December 2019.
(Subsequent to the quarter’s end, Antibe raised $2.6 million from the exercising of warrants.
On the stock, Loe said there is potential for higher valuation once Anitbe’s ATB-352 and ATB-340 are brought into the mix.
“Value-critical data are imminent and likely to be in the public domain by end-of-month, based on last update from Antibe itself that predicted data release within six weeks of last patient enrolled, which was in late Feb/20,” Loe said.
“Our valuation is still based on NPV (40 per cent discount) and multiples of our 2025 EPS and EBITDA, which importantly do not incorporate any royalty revenue contribution from ATB-352/ATB-340 and this assumption is poised for revision once either or both assets advance into formal clinical testing,” he wrote.