Antibe Therapeutics — Working towards a GI-safe NSAID drug

Antibe Therapeutics — Working towards a GI-safe NSAID drug

Antibe’s lead drug, ATB-346, combines a hydrogen sulfide (H2S)-emitting molecule with naproxen, an off-patent non-steroidal anti-inflammatory drug (NSAID). The firm plans to start a double-blinded Phase IIb osteoarthritis (OA) study in July 2018, with data expected in Q418. The trial’s efficacy results can build on recent Phase IIb gastrointestinal (GI) safety data and position Antibe well to seek ATB-346 partnerships or out-licensing deals.

Written by

Pooya Hemami

Analyst - Healthcare

Antibe Therapeutics

Working towards a GI-safe NSAID drug

Pharma & biotech

QuickView

14 June 2018

Price

C$0.39

Market cap

C$80m

Share price graph

Share details

Code

ATE

Listing

TSX-Venture

Shares in issue

205.2m

Business description

Antibe Therapeutics is a Canadian company whose core drug development platform involves chemically linking a base drug to a patented, hydrogen sulfide (H2S)-releasing molecule to develop new products that are improved and safer versions of existing drugs, particularly for pain and inflammation.

Bull

Large market opportunity for ATB-346, as it targets broad pain and inflammation indications served by established NSAIDs like naproxen and celecoxib.

Preclinical candidates (ATB-352 and ATB-340) provide additional upside opportunities for H2S delivery platform.

ATB-346 has minimal effects on blood pressure to date (a known side effect of NSAIDs).

Bear

Lack of head-to-head efficacy data of ATB-346 versus common NSAIDs (naproxen or celecoxib).

Dependence on securing a licensing partner and/or obtaining additional financing prior to starting Phase III studies on ATB-346.

ATB-346 showed liver enzyme elevations in an earlier Phase I study at doses significantly higher than 250mg daily dose under evaluation.

Analysts

Pooya Hemami, CFA

+1 (646) 653 7026

Maxim Jacobs, CFA

+1 (646) 653 7027

Antibe’s lead drug, ATB-346, combines a hydrogen sulfide (H2S)-emitting molecule with naproxen, an off-patent non-steroidal anti-inflammatory drug (NSAID). The firm plans to start a double-blinded Phase IIb osteoarthritis (OA) study in July 2018, with data expected in Q418. The trial’s efficacy results can build on recent Phase IIb gastrointestinal (GI) safety data and position Antibe well to seek ATB-346 partnerships or out-licensing deals.

ATB-346 could have a safer GI profile than naproxen

Oral NSAIDs like naproxen relieve pain and inflammation but can cause GI distress and ulceration with prolonged use. H2S is believed to reduce inflammation in the GI tract and protect against NSAID-induced injury. Antibe believes that combining H2S with naproxen should maintain therapeutic efficacy while providing a significantly improved side-effect profile versus naproxen or other commonly used NSAIDs.

Phase IIb study demonstrates lower ulceration rate

In March 2018, Antibe reported that in a 244-patient Phase IIb GI safety study comparing 250mg of ATB-346 once-daily to 500mg of naproxen twice-daily in healthy volunteers, the drug was well tolerated and met its primary endpoint of incidence of gastric or duodenal ulcers of at least 3mm diameter with unequivocal depth. Patients taking ATB-346 had a 2.5% ulceration rate vs 42.1% for the naproxen group (p<0.001). The company showed in 2016 in a 12-pt Phase IIa knee OA study that 250mg once-daily ATB-346 delivered a 7.6 unit pain relief score (using WOMAC pain scale) at 10 days; other studies reported that naproxen or celecoxib usually provide c 4-unit improvements vs baseline after prolonged use.

H2S platform drugs in other pain/inflammation areas

In 2017 Antibe began IND-enabling preclinical studies on ATB-352, a derivative of ketoprofen (a potent NSAID), to be positioned as a non-addictive alternative to opioid medications for acute pain treatment. ATB-340, a H2S releasing derivative of aspirin, is in preclinical development and is aimed as a chronic low-dose long-term anti-thrombotic drug that could avoid the GI distress associated with aspirin.

Valuation: Current share price implies EV of C$75m

Antibe had C$1.9m cash and C$3.0m in outstanding convertible debentures at YE17, but has since received about C$4m from warrant exercises and nearly all outstanding debentures have since been converted to equity. Antibe has sufficient cash on hand to complete the Phase IIb OA study (estimated C$2.6m cost).

Historical financials

Year
end

Revenue
(C$m)

PBT
(C$m)

EPS
(C$)

DPS
(C$)

P/E
(x)

Yield
(%)

03/16

4.4

(3.8)

(0.05)

0.0

N/A

N/A

03/17

9.1

(6.1)

(0.06)

0.0

N/A

N/A

Source: Bloomberg

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US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

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NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Disclaimer

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison's solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are "wholesale clients" for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document.
A marketing communication under FCA rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a "personalised service" and, to the extent that it contains any financial advice, is intended only as a "class service" provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited ("FTSE") (c) FTSE [2014]. "FTSE(r)" is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE's express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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