Antibe Therapeutics Inc(Pre-Merger) ATBPF

RE:ATE at 3 $ Zachs small cap

[dns236]

Conclusion and Valuation

The efficacy results from the Phase 2b trial are as good as could have been hoped for and represent a significant inflection point for the company. The fact that the lowest effective dose has yet to be established is a positive, as moving to lower doses may improve an already good safety and tolerability profile. We find very little to be concerned with regarding the data, as even the LTE rate is in line with other NSAID trials after accounting for various confounding factors. With robust efficacy and unparalleled GI safety data in hand the company will be in a strong negotiating position as partnering discussions ramp up. Based on the results, we have increased the probability of approval to 80%, decreased the discount rate to 13%, and increased estimated global peak sales for ATB-346 to $3.0 billion. Based on these changes our valuation has increased to CAD$3.00. We were confused by the sell-off following the data release, which may have been the result of misunderstandings surrounding the data, and would view any continued weakness as a tremendous buying opportunity.