Zeus Capital analyst Dr Gary Waanders said this morning about Motif Bio Plc (LON:MTFB): “We believe the current market cap of £44m ($63m) heavily discounts Motif relative to a group of highly comparable peers in antibiotic development”
Motif Bio Plc (LON:MTFB), is a late clinical stage antibiotic development company. This morning the company reported its final results for the year ended December 31st, 2015 with a cash balance of $28.6m. Motif’s lead drug candidate, iclaprim, is in phase III clinical trials for serious and life threatening bacterial infections, particularly those caused by drug resistant bacteria. Iclaprim, a next-generation antibiotic targeting an under-utilised mechanism of action, causes rapid killing of bacteria making it an attractive candidate for acute infections caused by antibiotic-resistant species. In total Motif raised £23m net of expenses in 2015 enabling it to advance iclaprim into phase III clinical trials. With iclaprim approval and launch on-track for 2018 our risk-adjusted fair value estimate for Motif Bio is £189m (174p per share).
* Regulatory – Motif achieved a number of significant milestones with the FDA including authorisation to proceed with phase III clinical trials of iclaprim in both acute bacterial skin and skin structure infections (ABSSSI) and hospital acquired bacterial pneumonia (HABP); designation of iclaprim as a Qualified Infectious Disease Product (QIDP) for both ABSSSI and HABP providing an additional 5 years of Hatch-Waxman market exclusivity post approval (giving a total of 10 years market exclusivity); and Fast Track designation potentially shortening the time required for regulatory submissions and review.
* Operational progress – Motif engaged Covance, a global CRO with deep expertise in acute infections to conduct the international, multicentre phase III trials in ABSSSI now underway. Iclaprim’s high potency was independently established showing activity against over 2,000 bacterial strains from around the world with almost 1,200 strains of Staphylococcus Aureus (including MRSA), a bacteria frequently associated with ABSSSI and HABP. Furthermore, iclaprim has also been shown to rapidly kill an MRSA strain (99.9% killed within 4-6 hours vs 8-10 hours for vancomycin), critical for acute life-threatening infections.
* Financials – the company raised £23m net of expenses in 2015 through an IPO in March and a secondary fund raising in July. Motif reported an operating loss for the year of $8.3m with SG&A costs of $3.6m and R&D expenses of $4.7m. R&D spending will increase in 2016 as the company’s phase III trial activities increase. The company ended the year with net cash of $24.8m and based on our forecasts for 2016 we estimate Motif will end the year with a net debt position of $8.7m in the absence of additional funds.
