Motif Bio Plc (LON:MTFB), is a late clinical stage antibiotic development company. This morning the company announced that its iclaprim phase III clinical trial in acute bacterial skin and skin structure infections (ABSSSI), REVIVE-1, is progressing well with patient enrolment ahead of schedule. The result of this is that data from the trial is now expected to be available in Q2 2017, sooner than previously anticipated H2 2017. The second phase III trial in ABSSSI, REVIVE-2, continues on track with results expected in H2 2017. Motif Bio has also announced the renegotiation of its Convertible Promissory Notes (CPNs) held by Amphion Innovations with a principal value of $3.55m in total. Our risk-adjusted fair value estimate for Motif Bio is £204m (188p per share).
* REVIVE 1 and 2 – Motif began dosing patients with iclaprim in its phase III trials in ABSSSI in March this year. These international, multicentre trials are being conducted by the CRO Covance, a global CRO with deep expertise in infectious diseases. Each trial will treat 600 patients, randomised to receive either iclaprim or vancomycin (standard of care). Iclaprim has been designated by the FDA as a Qualified Infectious Disease Product (QIDP) for ABSSSI providing an additional 5 years of Hatch-Waxman market exclusivity post approval (giving a total of 10 years market exclusivity) and Fast Track designation for regulatory submissions and review.
* Under the original terms of the CPNs, Amphion was entitled to convert all of the outstanding principal and interest at $0.2447 per share at any time after maturity at 31 December 2016. At that time, Motif would have accrued $441,185 in interest cost under the CPNs, equivalent to over 1.8 million ordinary shares with a value in excess of $1.2 million based on Motif’s closing share price and exchange rates on 7 September 2016. Under the renegotiated terms, Motif has paid $314,146 in cash, and agreed to issue 409,000 ordinary shares to Amphion in full satisfaction of the accrued interest payments. Amphion has also agreed to the cessation of ongoing interest accruals. All further payments of principal will be through the issuance of ordinary shares or ADSs (at the Company’s election) at $0.2447 per share and Amphion will also be granted a right to convert prior to maturity date. In addition, conditional on its listing on NASDAQ, Motif has entered into a consultancy agreement with Amphion to provide it with certain corporate services (such as investor relations, back office and accounting functions), which Amphion would provide for a minimum term of 12 months for a fee of $15,500 per month.
Comment: Motif Bio Plc is progressing its iclaprim phase III clinical trials very efficiently and we now expect results from REVIVE-1 to be available in Q2 2017, earlier than previously anticipated. Pending clarification from the company regarding its NASDAQ IPO our financial forecasts remain suspended.
