Antisense Therapeutics (ANP) PDF
Small changes for a big difference
SPECULATIVE BUY (initiation) | current price:A$0.125 | target price: A$0.38
§Antisense Therapeutics (ANP) is an advanced stage drug developer focused on inflammation in patients suffering from a number of rare genetic diseases with large unmet clinical needs.
§The treatment targets mRNA to inhibit the expression of specific genes linked to rapid and severe inflammation, often accelerating functional muscle mass losses in patients and potentially hindering effectiveness of first-line treatments.
§While the Ph2a DMD trial was small (inherent of rare disease indications), it exceeded expectations, showing improvements in disease progression versus a matched natural history control on standard of care.
§ANP is now heading into a milestone rich period with commencement of a pivotal Ph2b trial, data on additional indications, possible monetising of non-core indications, and potential awarding of regulatory incentives and priority status.
§We view the stock as materially undervalued given the data produced to date, potential for partnership deals, and likely out-licensing of indications beyond its core focus in DMD. We initiate coverage with a risk-weighted price target of A$0.38 per share and Speculative Buy recommendation.
What is Duchenne's Muscular Dystrophy?
DMD is an X chromosome-linked disease that affects 1 in 3,600 to 6,000 male births and occurs as a result of mutations in the dystrophin gene. The mutation causes a substantial reduction in the body's production of the dystrophin protein which is used to strengthen and protect muscle fibres as they contract and relax. Ongoing deterioration in muscle strength affects lower limbs leading to impaired mobility, and also upper limb function, leading to further loss of function and self-care ability. Studies show that patients with higher levels of immune T cells (lymphocytes – central role in immune response) expressing high levels of CD49d have more severe and progressive disease and are wheelchair bound by the age of 10 despite being on corticosteroids. With no intervention, the mean age of life expectancy is approximately 19 years.Strong results for DMD – moving to Phase 2b
ANP's Ph2a trial in non-ambulant boys suffering from DMD showed the treatment to be safe and well tolerated. While the trial was small (n=9), the data produced on the secondary efficacy endpoints in these patients showed statistically significant improvements in muscle function assessments versus natural history studies for disease progression. A larger trial in EU and US is expected to commence late CY21. The company is expected to further define its regulatory pathway in the coming months.Investment view
We initiate coverage on ANP with a Speculative Buy recommendation and risk-weighted target price of A$0.38 per share at the bottom end of our A$0.38 to A$1.82 per share valuation range. While considerable trial risk and hurdles remain, we view ANP as one of the best risk/reward plays in the healthcare space given the data produced to date and heading into a catalyst rich 36 month period. Downside risk to our price target is failure in the DMD Ph2b program (value is 2 cps) and prolonged delays in trial recruitment and commencement.
