Motif Bio plc, the clinical stage biopharmaceutical company specialising in developing novel antibiotics, yesterday announced that it has received written advice from a Scientific Advice Meeting with the Medicines Evaluation Board in Utrecht, The Netherlands, held on 16 September 2015, in relation to the Phase III Clinical Development Programme for iclaprim. The MEB’s advice confirms that two Phase III clinical trials plus microbiological data derived from the planned surveillance studies, are acceptable as pivotal registration studies for approval in the European Union through the “centralized” regulatory procedure of intravenous iclaprim, a targeted spectrum antibiotic designed to be effective against multi-drug-resistant bacteria, including MRSA.
Beaufort Securities view on Motif Bio Plc: Not wholly unexpected, but this represents the passing of another important regulatory milestone for Motif. The MEB’s acceptance of the Group’s proposal for two Phase III clinical trials for iclaprim, ensures it remains firmly on track to meet its goal of completing the two ABSSSI trials in 2017, and submitting a Marketing Authorisation Approval in Europe. Against the background of a looming crisis in the antibiotic world, it is not surprising that commercial interest in antibiotics has recently taken off. Yet valuating such clinical stage opportunities remains far from an exact science. While discount cashflow and other such financial methodology could create a valuation for Iclaprim, the size of the prospective opportunity (which potentially runs into billions of dollars in revenues) more often than not is seen to befuddle such an approach. In which case, peer group comparisons possibly provides a more realistic assessment. Paratek Pharmaceuticals, Inc. (NASDAQ: PRTK), appears to be the closest peer to Motif, having a similarly advanced antibiotic development product in Phase III trials and comes with a similar history. Right now, Paratek, is valued at around US$350m, or almost four times the current market capitalisation of Motif Bio. Beaufort retains its Speculative buy recommendation on Motif Bio with a price target of 110p/share.
