Drug developer Antibe Therapeutics (Antibe Therapeutics Stock Quote, Chart, News TSXV:ATE) is taking longer than expected to get to Phase 2 data for its lead clinical asset ATB-346, but that’s not changing analyst Douglas Loe’s thesis on the company and stock. Loe delivered an update to clients on Thursday where he said ATB-346 should capture a substantial piece of the market niche for naproxen. Toronto-based Antibe provided a corporate update on Thursday and reported its fiscal second quarter 2020 interim financials. The company announced that ATB-346’s Phase 2B dose-ranging, efficacy study on reducing osteoarthritis pain compared to placebo has surpassed 70 per cent enrolment, with the recruitment speeding up due to an increased number of clinical sites activated. “We’re pleased with the conduct of the study, although enrolment has been slower than originally anticipated,” said CEO Dan Legault, in a press release. “We’ve taken extra measures to expedite the completion of enrolment but with the inevitable slowdown during the holiday season we are pushing our guidance for top-line data to calendar Q1 2020.” On the financial side, Antibe reported a cash balance as of September 30, 2019, of $8.3 million compared to $6.0 million as of March 31, 2019, while since then they have raised $1.3 million from the exercising of warrants. The company reported product sales for its second quarter fiscal 2020 of $2.3 million and a loss of $5.0 million or $0.02 per share. Loe says the quarterly results compare favourably on a year-over-year basis to Q2/2019. The analyst notes that revenue and gross margins continue to be primarily derived from the company’s regenerative medicine business Citagenix. “Although Antibe does not generate revenue through its pharmaceutical division (but generates expenses through this division), we did observe that Citagenix contributed to earnings before tax (EBT) of ($0.41 million), which is fairly stable on a year-over-year basis from FQ219 at ($0.43 million),” said Loe. Looking ahead, with Phase 2 activities now intensifying, Loe says that R&D costs will be elevated rather than softened. Loe says that a few competitors are advancing Phase 2- or 3-stage knee osteoarthritis pain therapies, he is expecting that ATB-346 “can capture a substantial proportion of the market niche already established for naproxen.” “While timelines to trial data now likely to extend into FQ320/CQ120, we do not see this as significant delays on timelines on our existing forecasts nor as a reflection on ATB-346’s pharmacologic profile or its potential to demonstrate naproxen-like analgesia without naproxen-like side effects,” Loe said. “We expect more aggressive patient enrolment to resume in early FQ420 and for target enrolment to be achieved by mid-quarter, with data read-out near end-of-FQ420. Our model still assumes that pivotal Phase III knee osteoarthritis pain testing can commence by H121, leading to final filing/approval by F2024,” he wrote. With the update, Loe is maintaining his “Speculative Buy” rating and $1.40 per share price target, which at press time represented a projected return of 254 per cent.