Antibe Therapeutics Inc (OTCMKTS:ATBPF) is enjoying one of its best runs in the market, thanks to a string of positive news that has strengthened its outlook on Wall Street. The stock is already up by more than 200% backed by a high turnover of shares.
The big question now is whether the stock has what it takes to continue powering high, after the steep rise. In our view, the stock has all it takes to continue rising after achieving important milestones on the development of its pipeline of drugs.
Antibe Therapeutic Price Action
The stock has already pulled back after clocking record highs of $0.061. A dip to the $0.41 handle may as well be a good buy opportunity for a stock that has proved to be a reliable pullback play time after time.
A surge in trading volumes to highs of 1 million further affirms growing investor confidence in the stock’s long-term prospects. As it stands the stock, remains well positioned to spike higher to the $0.61 handle above which it will register a new 52 week high.
Sell-offs in the short term should be limited to the $0.37 handle, which happens to be a key support level, below which its tank to the sub $0.30 level.
What Does Antibe Therapeutics Do?
Antibe Therapeutics is a pharmaceutical company based in Toronto Canada. The company through its subsidiaries develops and licenses patent-protected pharmaceuticals. Its lead compound is ATB-346, a hydrogen sulfide-releasing derivative, currently in Phase II clinical trials for the treatment of osteoarthritis and rheumatoid arthritis.
The pharmaceutical company also offers tissue regenerating products such as bone grafting and dental membrane solutions for orthopedic markets.
Why is the Stock Spiking?
Antibe Therapeutics has seen its sentiments on Wall Street receive a boost, on the announcement that lead drug ATB-346 met its primary endpoint in Phase 2B gastrointestinal safety study. Trial results indicate that the lead candidate drug demonstrated superior GI safety compared to Naproxen, which is the most is prescribed Non-Steroidal Anti-Inflammatory Drug (NSAID).
ATB-346 demonstrated ulceration rate of 2.5% compared to 42.1% demonstrated by naproxen, at the end of a two-week trial. The drug also showed comparable efficacy to naproxen as a painkiller. However, unlike naproxen, it showed lower GI toxicity, a performance that gives it a competitive edge.
“The successful outcome of this study is the culmination of 15+ years of scientific research and validates Antibes’s hydrogen sulfide-releasing technology. Gastrointestinal safety has been a major global concern with NSAIDs for decades and we now have clinical data unequivocally demonstrating a solution to this unmet and serious medical problem,” said Chief Scientific Officer, John Wallace.
What Next For Antibe Therapeutics?
According to the Chief Executive Officer, Dan Legault, the extraordinary results pave way for Antibe Therapeutics to engage in regional licensing discussions with global pharmaceutical companies. The results should also allow the company to accelerate the development of other NSAIDs, including ATB-352 to address the global opioid crisis.
The company has already appointed Amal Khouri to its board of directors, as it moves to strengthen the level of expertise needed to accelerate the development of the pipeline of drugs.
The positive ATB-346 trial results mean Antibe Therapeutics is well positioned to be a key player in the multi-billion Non-steroidal Anti-inflammatory Drugs space.
Should Antibe Therapeutics fail to ink deals with other drug makers to accelerate the development of ATB-346, it may be forced to tap the debt market in order to develop ATB-346 on its own. The company had about $3 million in cash as of the start of the year. Given the current burn rate of $1.6 million a quarter, the company might not be able to fund its operations from the third quarter.
Stock dilution is one of the biggest risks that the stock could face going forward, as the company may be forced to issue shares in return for investor’s cash.
Antibe Therapeutics 2018 Outlook
Antibe Therapeutics has every reason to succeed in 2018 on the validation of its H2S platform. The better than expected ATB-346 trial results should continue to strengthen investors’ confidence in the company’s long-term prospects.
The stock sentiments could receive a further boost on the company posting positive trial results with other candidate drugs, AT-352 and ATB-340. The only risk that the company faces going forward is related to the development of ATB-346, which has already shown comparable efficacy to naproxen but with lower GI toxicity.
Antibe Therapeutics is a perfect fit for investors who are familiar with the levels of volatility in the biotech penny space. The risk-reward ratio is big especially after a recent pullback in the stock price.
In addition to being a long-term play, Antibe Therapeutics is a potential buy-out candidate. Larger pharmaceuticals looking to expand and advance their footprint in the NSAIDs space could acquire the company given the potential ATB-346 has in addressing the opioid menace.
Disclosure: We have no position in ATBPF and have not been compensated for this article.