ATE.TO: Awaiting Update on Otenaproxesul Following AME Study Pause

By David Bautz, PhD

OTC:ATBPF | TSX:ATE.TO

READ THE FULL ATE.TO RESEARCH REPORT

Business Update

Phase 3 Program for Otenaproxesul on Pause

On August 3, 2021, Antibe Therapeutics, Inc. ATE ATBPF announced that the absorption, metabolism, and excretion (AME) study of otenaproxesul has been paused due to a pre-specified safety threshold being exceeded. The study had enrolled a total of 42 subjects that were randomized to receive either 75 mg or 100 mg of otenaproxesul daily, of whom 35 had completed the full 28 days of dosing and seven had completed 21 days of dosing. Following completion of the 28-day administration period, three of the subjects in the 100 mg cohort exhibited liver transaminase levels that were >5X the upper limit of normal (ULN), which is what triggered the pause in the trial.

The news of liver transaminase elevations is very unexpected as this was not previously seen in any of the long-term animal toxicology studies. And while the liver transaminase elevations are concerning, there were no elevations in other liver tests, thus there are no Hy's Law concerns. In addition, none of the patients with elevated liver transaminase levels had any signs of clinical illness and all were asymptomatic.

Since all subjects in the study were housed at the clinical research center for the entire duration of dosing any outside influences that could have affected liver transaminase levels can be ruled out, thus pointing to a drug-specific phenomenon. However, the only patients with large increases in liver transaminase levels were in the 100 mg cohort, thus it also appears as though it is a dose-dependent effect.

The study has a pre-specified 14-day post-administration observation period. The company is continuing to analyze blood samples from all study subjects during the observation period to determine the extent of the liver transaminase increases, including their duration. In addition, the level of COX inhibition will be examined through biomarkers such as TxB2 and PGE2. Following the completion of the observation period, Antibe will evaluate all of the available data from the study in an effort to better understand the cause of the liver transaminase elevations. The company will also be requesting a meeting with Health Canada regarding the development path for otenaproxesul once all of the data has been collected and analyzed. The timing of this meeting is still not known; however, it is possible it could occur before the end of 2021.

While the future of otenaproxesul is currently uncertain, we believe there is still a potential path forward for the program. We anticipate the company approaching Health Canada with a plan to perform an additional AME study testing lower doses of the drug, which may also include a 75 mg cohort (assuming no liver transaminase elevations are seen in that cohort during the current observation period). As a reminder, the results of the Phase 2b efficacy trial showed that the 150 mg dose of otenaproxesul had robust efficacy in the primary endpoint and missed being statistically significant due to that arm of the trial not being properly powered. Thus, a lower dose may still offer sufficient efficacy, however that dose would have to be less than 100 mg (with additional insight into this possibility being obtained from the COX inhibition data). Ultimately, the path forward for otenaproxesul will not be determined until after the company is able to meet with Health Canada, thus we don't anticipate any clarity until that meeting is able to occur.

Financial Update

On August 13, 2021, Antibe announced financial results for the first quarter of fiscal year 2022 that ended June 30, 2021. The company reported revenues of CAD$2.7 million for the three months ending June 30, 2021 compared to revenues of CAD$1.1 million for the three months ending June 30, 2020. Sales were higher due to the impact of COVID-19 on the prior year's results.

General and administrative, selling and marketing, research and development, stock-based compensation, and amortization and depreciation totaled CAD$7.4 million for the first quarter of fiscal year 2022 compared to CAD$5.3 million for the first quarter of fiscal year 2021. The increase was primarily related to the following:

• G&A expenses decreased slightly to CAD$1.6 million in 1QFY22 due to decreased professional and consulting fees partially offset by increased salaries and wages, office, and other expenses.

• Selling and marketing costs were CAD$0.7 million in 1QFY22 compared to CAD$0.4 million in 1QFY21. The increase was due to higher salaries, commissions, travel, and entertainment costs.

• R&D expenses were CAD$3.2 million in 1QFY22 compared to CAD$2.1 million in 1QFY21. The increase was primarily due to higher salaries, professional and consulting fees, and research and clinical trial costs.

• Stock-based compensation in 1QFY22 was CAD$1.8 million compared to CAD$1.0 million in 1QFY21 due to expensing of previously granted RSUs.

• Amortization and depreciation was CAD$0.1 million in both 1QFY21 and 1QFY20.

As of June 30, 2021, Antibe reported cash and cash equivalents of approximately CAD$66.8 million, which we estimate is enough to fund operations for at least two years. As of June 30, 2020, Antibe had approximately 51.6 million shares outstanding and, when considering stock options and warrants, a fully diluted share count of approximately 64.0 million shares.

Conclusion

We await an update from the company regarding the future of otenaproxesul in October 2021 once the company has completed analyzing the data that should help to give a clearer picture of the cause and implications for the pause of the AME trial. As we await an update from the company we have made no changes to our model and our valuation remains at CAD$6.00 per share.

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $40,000 annually for these services. Full Disclaimer HERE.