ATE stock has a 317 per cent upside, says Echelon

Investors searching for a high risk-tolerant stock in the biotech field should be thinking about Antibe Therapeutics (Antibe Therapeutics Stock Quote, Charts, News, Analysts, Financials TSX:ATE), according to Echelon Capital Markets analyst Stefan Quenneville. The analyst reviewed Antibe’s latest quarterly results in a Thursday report, saying the company’s pain drug presents a meaningful commercial opportunity.

Clinical stage biotechnology company Antibe, which develops drugs for acute pain and inflammation based on ATE’s platform of hydrogen sulfide-releasing (H2S) analogs, reported its Q4 and year-end financial results for its fiscal 2023 which ended March 31, 2023.

The company reported no revenue for the fourth quarter revenues and had an EBITDA spend at $3.1 million, which was below the consensus call at negative $6.2 million and Quenneville’s estimate at negative $4.5 million. EPS was negative $0.07 compared to the Street’s and Quenneville’s call at negative $0.09 per share.

Antibe’s lead drug candidate is otenaproxesul, which is in development as a safer alternative to opioids and NSAIDs for acute pain, while its second pipeline drug is ATB-352, which is being developed for a specialized pain indication.

“We made excellent progress in the year, much of it behind the scenes,” commented Dan Legault, Antibe’s CEO, in a statement. “Foremost is the successful transition to otenaproxesul’s faster- absorbing formulation, a significant step that involved launching a new production process in a new plant. With comprehensive liver safety modeling in hand, we’re making final preparations for a short PK/PD study to finalize dose selection for the Phase II bunionectomy trial.”

Overall, the fourth quarter results came largely in-line, Quenneville said, despite the timeline for otenaproxesul’s Phase 2 bunionectomy study being slightly delayed relative to the analyst’s previous expectations.

“Given the abuse potential of opioid treatments and the gastrointestinal side-effects of NSAIDs, the US$13 billion acute pain market remains a meaningful commercial opportunity for Antibe,” Quenneville wrote.

Ending the quarter with a cash balance of $38.9 million, Quenneville said ATE has sufficient resources to provide over two years of runway to continue otenaproxesul’s clinical development. 

On the clinical timelines, the analyst said Antibe’s PK/PD study should be completed in the fourth quarter of calendar 2023, while the Phase 2 bunionectomy study is set to initiate shortly after the fourth quarter of 2023.

“While both the Phase II bunionectomy initiation and top line data read out timeline are delayed by about a quarter relative to our previous expectations, we view these target timelines as reasonable given the acute administration period, rapid recruitment process and straightforwardness of these trial types, and we are not materially changing our forecasts. Indeed, a Phase III program could be initiated shortly after an end of Phase II meeting with FDA and completed within 12-18 months,” he said.

With the update, Quenneville maintained a “Speculative Buy” rating and $2.00 target on ATE, which at press time represented a projected one-year return of 317 per cent.

“With the stock trading below its cash value of ~$0.61/shr ($38.9 million), Antibe remains an opportunity for investors with a high-risk tolerance,” Quenneville wrote.