Motif Bio plc LON:MTFB, the clinical stage biopharmaceutical company specialising in developing novel antibiotics, yesterday announced its maiden full year audited financial results as an AIM-listed company. Operational highlights of the period included he U.S. Food and Drug Administration (FDA) agreed to Phase III trials of iclaprim; QIDP designation granted by the FDA for iclaprim in ABSSSI and HABP in July 2015; Independent tests by JMI Laboratories showed iclaprim to be effective in vitro against a range of Gram-positive bacteria and 16 times more potent than trimethoprim; and Motif contracting Covance, a global leading CRO, for Phase III clinical trials of iclaprim. Since the accounting period end, Motif began dosing the first patient in the Phase III iclaprim trials, it named MTS Health Partners as its U.S. Corporate Financial Advisor in conjunction the Group’s expected securing its own NASDAQ listing in 2017 and also confirmed numerous senior appointments, including Pete A. Meyers as CFO, Rajesh B. Shukla as Vice President Clinical Operations, and named Jon Gold as strategic financial consultant.
Beaufort Securities view on Motif Bio PLC LON:MTFB : Motif Bio now finds itself ideally positioned as an antibiotic development company with a lead compound, iclaprim, in Phase III clinical trials. It is targeting serious and life threatening infections where a 30-year absence of new development together over-prescription of existing products has created an urgent need for new and novel solutions. Moreover, it is in the rare position of already having comprehensive data from clinical trials from more than 500 patients, including activity against multi-drug resistant bacteria such as MRSA. With exceptional safety and efficacy characteristics, iclaprim is set for commercialisation during 2018, from which new indications for this platform molecule will be developed and from which total annual sales potential will amount to several billions of US$. This might seem to be a dramatic claim, but elementary analysis of the existing North American market bears it out. If one were to consider, for example, just the 3m US patients suffering from skin cancer (iclaprim’s ABSSSI indication), while also recognising that around 25% of these also suffer from kidney or diabetes-related conditions for which obvious peer drug, Vancomycin, has required dose adjustment for renal impairment, the immediate opportunity for iclaprim (being a bactericide) is in excess of US$2bn (based expected treatment cost of US$3000/day). The potential is truly enormous. Much more immediate news for Motif, however, concerns its pending NASDAQ listing – which is very important, given the willingness of specialist US investors to much more realistically value such early stage biotech. Indeed, Paratek Pharmaceuticals , which is a near-identical stage antibiotic development company, sustains a valuation over four-times that of Motif. Realistically, Motif should quite dramatically re-value upon achieving its own NASDAQ listing, which is expected to take place during Q3’2016. Beyond this, considering the obvious global sales potential for iclaprim, given that Motif management are already undertaking drug positioning assessments of US hospitals while also discussing non-US distribution partnerships with Big Pharma, a valuation in excess of US$1bn being achieved within 24 months is by no means unrealistic. Motif Bio remains on Beaufort’s Speculative Buy list and is one of our key stock picks for 2016.
