PR & Interviews, page-93

Botanix Pharmaceuticals
(BOT)
Anti Microbial Trial
Recommendation
Buy (unchanged)
Price
$0.07
Target (12 months)
$0.25 (unchanged)
Risk
Speculative
Analyst
John Hester 612 8224 2871
Tanushree Jain 612 8224 2849
Authorisation
David Coates 612 8224 2887
GICS Sector
Pharmaceuticals & Biotechnology
Expected Return
Capital growth 257%
Dividend yield 0.0%
Total expected return 257%
Company Data & Ratios
Enterprise value $33.1m
Market cap $68.1m
Issued capital 972.7m
Free float 91%
Avg. daily val. (52wk) $930,000
12 month price range $0.065 - $0.29
Price Performance
BELL POTTER SECURITIES LIMITED
ACN 25 006 390 7721
AFSL 243480

(1m) (3m) (12m)
Price (A$) 0.09 0.09 0.11
Absolute (%) -19.5 -22.2 -36.4
Rel market (%) 9.7 3.4 -17.3
Speculative
New Phase 2 Trial For Anti-Bacterial Platform
Calendar year 2020 will have significant news flow for Botanix with two separate
Phase II trials reporting in the coming months. The first of these is for BTX1204
treating atopic dermatitis which is due 1Q CY2020. The second study reporting later
this year is BTX1702 in Rosacea.
The company has now announced a third Phase II study. BTX1801 is a new
formulation from its synthetic cannabinoid platform for use as an antimicrobial. The
company had previously released data showing that the compound was effective in
killing 132 different gram positive bacteria including staphylococcus aureus (s. aureus)
and methicillin resistant staphylococcus aureus MRSA (aka golden staph). The
formulation of BTX1801 is a tightly held trade secret with patents pending.
The use of the synthetic cannabinoids in clinical trials is in no way effected by any of
the FDA’s announcements regarding use of CBD products as a food or dietary
supplement. BOT is seeking to have its products registered as drugs and is following
the traditional clinical pathway towards registration.
The indiscriminant use of antibacterial medications including mupirocin over decades
has resulted in the emergence and growing prevalence of anti-bacterial strains of
s.aureus and MRSA. BOT has now released new data to demonstrate the potent
antibacterial activity of BTX1801 against mupirocin resistant strains of s.aureus and
MRSA. As a result BOT will now invest in a phase 2 study to investigate the potential
of this drug to nasal colonisation of these bacteria. We expect this trial will be a
stepping stone to a pivotal study in the US.
Maintain Buy Rating
Short term catalyst this month is the headline data from the Atopic Dermatitis trial. The
valuation is maintain at $0.25 and we retain our Buy (Speculative) rating.
Absolute Price Earnings Forecast
June Year End FY19 FY20e FY21e FY22e
Revenues 4.8 7.6 20.2 51.1
EBITDA $m -17.0 -18.4 -7.7 33.1
NPAT (underlying) $m -17.0 -18.4 -7.7 33.1
NPAT (reported) $m -17.0 -18.4 -7.7 33.1
EPS underlying (cps) -2.2 -1.8 -0.8 3.3
EPS growth % 1% nm nm nm
PER (x) nm nm nm 2.1
FCF yield (%) nm nm -13% 45%
EV/EBITDA (x) (2.0) (1.8) (4.3) 1.0
Dividend (cps) - - - -
Franking 0% 0% 0% 0%
Yield % 0% 0% 0% 0%
ROE % -2549% -83% -53%