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Biotech Co. Remains Opportunity for Those With High Risk Tolerance
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Recently, Antibe Therapeutics released its fiscal 2023 year-end (FQ423) results, which remained inline with expectations, noted an Echelon Capital research note.

In a June 29 note, Echelon Capital Markets analyst Stefan Quenneville reported that Antibe Therapeutics Inc. (ATE:TSX.V; ATBPF:OTCQX) had recently disclosed its fiscal 2023 year-end (FQ423) results. The report's findings indicate that the company's performance closely aligned with Echelon's expectations.

Quenneville said, "We are maintaining our Speculative Buy rating and US$2.00 price target following FQ423 results that came largely in line with expectations despite the timeline for Antibe’s otenaproxesul Phase 2 bunionectomy study being slightly delayed relative to our previous expectations. Given the abuse potential of opioid treatments and the gastrointestinal side effects of NSAIDs, the US$13B acute pain market remains a meaningful commercial opportunity for Antibe. With the stock trading below its cash value of ~US$0.61a share (US$38.9M), Antibe remains an opportunity for investors with a high-risk tolerance."

Better Cash Burn Than Expected

As anticipated by Quenneville, the latest FQ423 report from Antibe Therapeutics revealed no revenues. Notably, the expenditures for the otenaproxesul program, as measured by EBITDA spend, amounted to US$3.1 million. This figure fell below our initial estimate of US$4.5 million and significantly trailed the consensus estimate of US$6.2 million.

Regarding earnings per share (EPS), the company recorded a value of -US$0.07, which aligned with our projections and the consensus estimate of -US$0.09. Moreover, the operating cash burn, factoring in working capital, stood at US$3.7 million. It's worth noting that [Company Name] concluded the quarter with a comfortable cash balance of US$38.9 million. This financial reserve provides ample resources to sustain the clinical development of otenaproxesul for a period exceeding two years.

In addition to the cash balance, [Company Name] is set to receive a guaranteed sum of US$2.6 million over the next three years from the sale of the Citagenix dental supplies business. Furthermore, there are potential sales-based milestone payments of US$4.0 million associated with the transaction.

Focus Maintained Despite Delays

The completion of the PK/PD study is anticipated to take place in CQ423, followed closely by the initiation of the Phase 2 bunionectomy trial in CQ124. Antibe indicated that the top-line data from this study is expected to be unveiled in CQ224.

Although both the commencement of the Phase 2 bunionectomy trial and the timeline for the release of top-line data have experienced a slight delay of approximately one-quarter compared to our previous projections, Quenneville considered these target timelines to be reasonable.

Nuance Pharma Seeking To Recind License Agreement


In January 2022, Antibe Pharmaceuticals entered into a license agreement with Nuance Pharma. As part of this agreement, Nuance made an upfront payment of USUS$20 million, forming a crucial component of the overall USUS$80 million licensing deal that granted them exclusive marketing rights for otenaproxesul in China.

However, the situation has taken an unexpected turn as Nuance now seeks to rescind the license agreement and recover the upfront payment. Their allegation revolves around Antibe's alleged failure to adequately disclose information regarding the risks associated with transaminase elevations linked to otenaproxesul. Nuance contends that this lack of information sharing constitutes a breach of the agreement.

Despite Nuance's claims, Quenneville noted, "We believe it is unlikely that the company will have to return the upfront payment as the risks of potential side-effects were well-known given this type of clinical setback is common in clinical trials. Antibe completed an in-person arbitration proceeding with Nuance in May and now expects the decision in CQ323."

Structure and Predictions

Quenneville's research shared recent rating and target price information as well as current market data on the company.

Rating: Speculative Buy

Price: US$0.26, with a 52-week range between US$0.41 - US$0.71

Price Target: US$0.75

Market Cap: US$23 million

The company carries an enterprise value of US$8 million and a net debt of US$39 million. Antibe's share structure breaks down to 53 million basic shares and 63 million fully diluted shares.

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  1. Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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Disclosures for Echelon Capital Markets, Antibe Therapeutics Inc., June 29, 2023

Echelon Wealth Partners Inc. is a member of IIROC and CIPF. The documents on this website have been prepared for the viewer only as an example of strategy consistent with our recommendations; it is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investing strategy. Any opinions or recommendations expressed herein do not necessarily reflect those of Echelon Wealth Partners Inc. Echelon Wealth Partners Inc. cannot accept any trading instructions via e-mail as the timely receipt of e-mail messages, or their integrity over the Internet, cannot be guaranteed. Dividend yields change as stock prices change, and companies may change or cancel dividend payments in the future. All securities involve varying amounts of risk, and their values will fluctuate, and the fluctuation of foreign currency exchange rates will also impact your investment returns if measured in Canadian Dollars. Past performance does not guarantee future returns, investments may increase or decrease in value and you may lose money. Data from various sources were used in the preparation of these documents; the information is believed but in no way warranted to be reliable, accurate and appropriate. Echelon Wealth Partners Inc. employees may buy and sell shares of the companies that are recommended for their own accounts and for the accounts of other clients. Echelon Wealth Partners compensates its Research Analysts from a variety of sources.

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For U.S. persons only: This research report is a product of Echelon Wealth Partners Inc, under Marco Polo Securities 15a-6 chaperone service, which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account. Research reports are intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a-6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not the Major Institutional Investor. In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, Echelon Wealth Partners Inc. has entered into a chaperoning agreement with a U.S. registered broker-dealer, Marco Polo Securities Inc. ("Marco Polo"). Transactions in securities discussed in this research report should be affected through Marco Polo or another U.S. registered broker dealer.

U.K. Disclosures: This research report was prepared by Echelon Wealth Partners Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. ECHELON WEALTH PARTNERS INC. IS NOT SUBJECT TO U.K. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS. The contents hereof are intended solely for the use of, and may only be issued or passed onto persons described in part VI of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein.

Copyright: This report may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever, nor may the information, opinions or conclusions contained in it be referred to without in each case the prior express written consent of Echelon Wealth Partners.

ANALYST CERTIFICATION Company: Antibe Therapeutics | ATE:TSX I, Stefan Quenneville, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.

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