Anthera: Biotech bet in lupus treatment

by John McCamant, editor The Medical technology Stock Letter

Anthera (ANTH) has been under considerable pressure. But we believe that the stock is ridiculously undervalued and sells at or below its current cash position despite a very attractive Phase IIb drug development candidate, blisibimod, that is poised to deliver positive data.

If looks like short sellers are hitting the stock in combination with some frustrated shareholders that own at much higher prices and are upset that ANTH blew up the cardio program.   

Meanwhile, ANTH shareholders were pleased to see that MLV + Co recommended the company and initiated with a one year price target of $4.50.  

MLV + Co said, “We are initiating coverage of Anthera Pharmaceuticals, Inc. with a BUY recommendation and a $4.50 one-year price target as we anticipate topline data from PEARL-SC, a Phase II trial of the company's lead clinical product blisibimod in patients with systemic lupus erythematosus (SLE) in 2Q:12. With plans to initiate a Phase III program this year, Anthera is on-target to compete with Benlysta, a recently approved therapy for SLE co-marketed by Human Genome Sciences and GlaxoSmithKline.”

The report also provided an important detail that will very important if ANTH delivers positive Phase IIb data.  

They said, “Anthera has already manufactured enough blisibimod for the entire PEARL-SC Phase III trial. The company expects to initiate a Phase III trial by the end of the year, following a meeting with the FDA. In our view, Anthera will benefit from the recent physician and patient awareness surrounding SLE and Benlysta, which we project will lead to timely enrollment of their Phase III trial.”

While we think ANTH’s stock could easily go higher than $4.50 on good Phase IIb data, we certainly appreciate their support and investment thesis.  

We believe that ANTH is poised to deliver positive Phase IIb data and that the stock price could be explosive on the upside as there could be a major short squeeze.  

Good data will also put them on Wall Street’s radar as the company will be in position for a very attractive partnership or they could get acquired at a significant premium.  

It is important to remember that good SLE data will increase the odds that blisibimod will work in other autoimmune diseases. Lilly is already in Phase III for RA with their drug development candidate that is in the same class.  

The bottom-line is that positive Phase IIb should propel ANTH’s share price significantly higher. ANTH is a buy under $4.

Learn more about this financial newsletter at John McCamant's The Medical technology Stock Letter.

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