Seeking Alpha
Profile| Send Message|
( followers)  

Since my weekend article, this week Antares (AIS) has published an updated presentation on its website. I previously wrote that "In my estimation, Antares is the most under-rated micro-cap biotech stock I have discovered in four years of due-diligence; just read Antares's revenue-stream quarter to quarter; this company is building rock solid value" (Ibid). This is no pump; the information betters most news releases-- and you will soon see why.

For example, on slide #9, Antares summarizes the market value of its collaborations with TEVA - a somewhat staggering $3B -- U.S. sales only. I state "staggering" because $3B for the U.S. alone is staggering! Seeing how the company already has marketed Tjet / Zomajet with TEVA / Ferring / JCR, it is notable that VIBEX, VIBEX 2, both now have a filed ANDA, and VIBEX MTX, Pen 1, Pen 2 are now moving into the later stages of clinical trials. See slide #10 for impressive market share of the HGH market. The partnership has now garnished a 5% market share in the U.S. and a 12% market share in Europe.

The company expects to file an NDA for VIBEX MTX in 2012. Note that an ANDA is already filed for VIBEX and VIBEX 1. VIBEX may clear a legal hurdle in the very near-term as TEVA seems well-positioned given the patent protection history of Antares for its VIBEX technology. For now, the VIBEX MTX is wholly owned by Antares for rheumatoid arthritis. This is a lucrative opportunity and I see the company is pursuing a European partner per slide #22.

In the GEL category, Antares's investors continue to look forward to the FDA's decision in Q4 for Anturol licensed to Watson. LibiGel with BioSante (BPAX) continues to move ahead on promising reports. These two opportunities alone represent more exponential value than the current stock price. If Anturol is approved by the FDA in late November-early December, the share price will be nowhere near where it is right now. I am wondering when the run-up in the share price will begin-- I expect it could be very soon as 'short' interest in the stock increased to a new high in 2011 for Antares in September.

Candidly, I am wrestling to discern a valuation of Antares because its late-stage pipeline is so deep. The current PPS in the $2.30s / share doesn't seem to equate with the now late-stage product line including:

  • 2 Products in market: Tject / Zomajet for HGH (TEVA, Ferring, JCR) and Elestrin (AZUR)
  • 3 Products with a filed: NDA - Anturol (Watson); ANDA - VIBEX 1 Epinephrine ((NYSE:TEVA)); and ANDA - VIBEX 2 Undisclosed (TEVA)
  • 2 Products moving towards NDA filing in 2012: LibiGel (BioSante) and VIBEX MTX (Pen 1 & Pen 2 may also follow soon after)
  • 1 Product is in phase 2: NestraGel (Population Council)
  • Additionally, I'm learning of other products in preliminary development not yet advertised by Antares (e.g. Copaxone - speculative thesis having some merit, TEVA seems to have a knee-deep list of product possibilities.)

Here's something worth noting: In 30 June 2011 the company reported[.pdf] it is debt-free and has $33M in cash.

As I've been learning, the revenue story at Antares is on the verge of exponential change within the next 6-18 months. On slide #21 we learn:

  • 2008 total revenue = $4.6M
  • 2009 total revenue = $8.3M
  • 2010 total revenue = $12.8M
  • Q1 & Q2 2011 total revenue = $7.1M
  • The company's cash burn in 2010 is an impressive $3.7M

The exponential change in the revenue stream that I see is based on:

  • Higher penetration of HGH Tject & Zomaject (TEVA, Ferring, JCR) and Elestrin (AZUR)
  • VIBEX epinephrine (TEVA) and Anturol (Watson) into the market in the next 6 months
  • VIBEX 2 (TEVA) in the market in the next year
  • LibiGel into the market in 18 months-2 years
  • Plus multiple milestones listed on slide #22 including Methotrexate NDA and an impending announcement of a European partnership

Readers should note that I have done my best to represent the presentation based on the facts supplied by Antares. Hopefully this answers why I have become so bullish. My conclusion is that Antares's presentation has unveiled an exponential revenue growth plan. It is my expectation that Antares will be net positive in 2012.

Disclosure: I am long AIS.

Disclaimer: Seeking Alpha requires me to declare what stocks I hold at the time of publication. Currently, I hold shares in AIS. I do not employ the terms "LONG" or "SHORT" because I trade based on price targets: at a gain or loss. I am yet to "short" any stock, and "long" simply means I hold the stock at the time of writing. Thus, I hold AIS shares right now, but after 72 hours from the time of publication by SA, I am free to sell AIS.




Disclosure: I am long AIS.

Source: Bullish On Antares As Company Updates Strategic Revenue Growth Plan