Antares Pharma, Inc. (ATRS)

[ED20332]

Antares Pharma Inc.
(AMEX: AIS)


Antares Pharma Inc. (AMEX: AIS)

We are initiating coverage of Antares Pharma Inc. with a BUY rating and a price target of $3.00. At a market cap of $59 million, we believe Antares represents an under-recognized, under-valued, and misunderstood opportunity. Antares is a specialty pharma company built around two primary drug delivery technologies. Their ATD transdermal gel platform and their injectable devices. They are developing internal products, and they collaborate with companies to enhance a current product, or develop a new drug.

The ATD Gel technology is used in several products. Elestrin (Estradiol ATD gel) was approved by the FDA in December 2006 for treatment of menopausal symptoms. Libi-Gel (testosterone ATD gel) started Phase III trials in December 2006 for female sexual dysfunction. Anturol (oxybutynin ATD gel) has already successfully completed Phase II testing.

Injectable devices; Antares features a disposable mini-needle product line and a reusable needle-free device for use in specialty and generic pharmaceutical products. In 2005 and 2006 they signed three deals with TEVA Pharmaceutical Industries Ltd. (TEVA) using these devices. Importantly, we believe these deals represent significant value for the company which is currently unrealized in their valuation. Potential entry into the biogenerics market is another key future value driver for the Company which represents upside to our estimates.

We anticipate several important catalysts driving Antares valuation during the next 12 months. These events include: 1) Advancement of Anturol into pivotal clinical trials for incontinence; 2) Approval of first product under the TEVA deal; 3) Receipt of significant milestones relating to Elestrin; and 4) Increased revenue with decreased operating losses, indicating Antares is achieving a sustainable business.

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