Antibe Therapeutics placed “Under Review” at Echelon

Bad news for Antibe Therapeutics (Antibe Therapeutics Stock Quote, Chart, News, Analysts, Financials TSX:ATE) has Echelon Capital Markets analyst Stefan Quenneville placing the stock under review.

On March 4, an arbitrator ruled against ATE in a dispute with Nuance Pharma regarding the licence agreement for the commercialization of otenaproxesul in the greater China region. The decision cannot be appealed.

“We strongly disagree with this decision,” commented CEO Dan Legault said. “Nonetheless, we acknowledge the fact that we agreed to binding arbitration in a foreign jurisdiction. Antibe respects the confidentiality and final nature of the arbitration proceedings and will accept the decision in good faith. We continue to believe that the comprehensive data package shared with Nuance for the previous chronic pain formulation fully reflected the drug’s safety and efficacy characteristics. Although this ruling presents a significant short-term challenge, we remain committed to developing otenaproxesul — particularly due to the strength of recent clinical results for acute pain that have significantly derisked its final trials.”

“Antibe announced today an unexpected US$24M ($32.6M) arbitration decision from the Singapore International Arbitration Centre in favour of Nuance Pharma for the recoupinof the US$20M upfront payment (and an additional US$4M in interest and legal costs) paid to Antibe in 2021 by Nuance for the marketing rights of otenaproxesul in China,” the analyst noted. “Since Antibe agreed to participate in a binding arbitration process, the Company will not be permitted to
appeal the decision. Given that the US$24M ($32.6M) owed is greater than Antibe’s current ~$21M cash balance (as of December 31, 2023), barring a sizeable cash injection or some sort of negotiated settlement with Nuance, the Company is in a dire financial position with going concern and potential insolvency risk.”

In a research update to clients March 4, Quenneville changed his rating on ATE from “Speculative Buy” to “Under Review” and changed his price target from $2.00 to “Under Review”.

“The immediate path forward for Antibe is uncertain and depends primarily on Nuance’s position on how aggressively it wishes to pursue its claims on Antibe’s cash balance or if there is a willingness on their part to pursue a negotiated settlement that would allow the clinical development of otenaproxesul to continue through the planned Phase II study, with it benefitting from the value creation should the drug demonstrate positive results,” the analyst concluded. “There is also the possibility of a cash injection from financial/strategic players however this appears less likely given the Nuance overhang.”