Biotech Values

[mcbio]

ANTH - lead drug targeting ACS in Phase 3

[I thought I would post an article about this company since they're involved in the ACS space and I hadn't seen anything about them in your 'Anticoagulant' tab. I'm assuming the answer to the question in the headline of the article is presumably "no." ; )

I posted on the company originally in #msg-47053947 where I speculated that they may have in-licensed at least a few of their drugs (typically a turn-off for me for a small-cap biotech).

Here's a link to the ACS drug directly from their Web site: http://www.anthera.com/products_a002.asp ]

http://finance.yahoo.com/news/Should-You-Buy-It-Anthera-tsmp-3943503405.html?x=0&.v=1

Should You Buy It?: Anthera Pharmaceuticals

Anthera Pharmaceuticals held its initial public offering in March and the company's stock stumbled out of the starting blocks. At Wednesday's closing price of $4.16, the stock is down about 40% from its IPO price of $7.

Anthera was brought public by venture capital firms VantagePoint and Sofinnova, both of which remain the company's largest shareholders. Anthera is currently conducting Phase-3 clinical trials for a potential drug aimed at treating acute coronary syndrome (ACS). In addition, the company has a lupus treatment that's currently in Phase-2 trials.

With that in mind, we're here to answer readers' questions: Should you buy it? Does Anthera's clinical pipeline hold value at these discounted levels, or should investors take a pass on the stock?

The writing may have been wall for Anthera early on (given the pricing of the IPO). A week before the offering, the deal was expected to go for $13 to $15 a share, but the company and its bankers ultimately settled for $7. As a result of raising only $42 million in its IPO, management quickly went back into the market in September for another $31.5 million private placement.

In June, Anthera started enrolling patients for a Phase-3 trial of its ACS treatment, varespladib. Patients will be treated with the drug for 16 weeks following an initial case of ACS, the point at which they are most at risk for another cardiovascular event. Varespladib has the potential to be the first drug approved in this space.

As for its lupus treatment (dubbed A-623), Anthera is looking to build upon the breakthrough that Human Genome Sciences made in 2009 with its new treatment, Benlysta. In addition, the company has received orphan-drug and fast-track status for its treatment of acute chest syndrome in patients with sickle-cell disease that is also in Phase-2 studies.
Anthera likely does not have enough cash on hand to finish these two trials. Even so, the company may seek a marketing partner, rather than going back to investors for more equity, which could further dilute the stock.

In the meantime, it's worth noting that Anthera insiders have found value in the stock at current levels. Three insiders, including Chief Financial Officer Christopher Lowe, purchased a total of 261,000 shares of the company on the open market in late September. The stock traded as low as $2.82 on Sept. 17.

The insider buying could be viewed as a sign of confidence from management and that the shares have limited downside potential. Even so, I believe that investors should avoid this stock at current levels.

The company has some potential winners in its clinical pipeline, but it lacks near-term catalysts and will likely need more money to complete its current trials.