On Thursday, Evercore ISI adjusted its financial outlook for AN2 Therapeutics (NASDAQ: ANTX) shares, revising the biopharmaceutical company's stock price target down to $2 from the previous $7.
The firm maintained its 'In Line' rating for the stock. The revision follows AN2 Therapeutics' first-quarter earnings update, which included a new timeline for Phase 2 data expected in August.
The company concluded the quarter with $118 million in cash reserves, which is considered sufficient to reach the critical data readout. However, the firm anticipates that AN2 Therapeutics may seek additional funds to strengthen its balance sheet in anticipation of Phase 3 trials, assuming these will resume in early 2025 after a potential end-of-Phase-2 meeting in the fourth quarter.
AN2 Therapeutics had voluntarily halted enrollment for the Phase 3 segment of its study in February, after a blinded aggregate analysis of ongoing Phase 2 trials indicated potentially lower efficacy than expected. This pause was not related to safety concerns but was based on comparisons with INSM’s Phase 3 study of Arikayce in a refractory setting.
In a recent discussion with ANTX's CEO Eric Easom, the company expressed cautious optimism that patient demographics might have influenced the lower blended blinded rate of culture conversion, which led to the pause in Phase 3 enrollment.
Adjustments to the enrollment criteria are being considered to address this. AN2 Therapeutics recalculated the blended blinded rate, excluding 'false converters', to be 14.5%, which Easom found to be a more reliable benchmark compared to the 24% for Arikayce and 3.5% for placebo.
Evercore ISI will remain neutral on AN2 Therapeutics' stock until more information becomes available from the upcoming Phase 2 data. The firm has also delayed its expectation for the company's product launch to 2028 from 2027, which is reflected in the updated price target.
InvestingPro Insights
Amidst the cautious outlook from Evercore ISI, AN2 Therapeutics (NASDAQ: ANTX) presents a complex picture for investors, with real-time data from InvestingPro painting a detailed financial landscape. With a market capitalization of approximately $67.71 million, the company's financial metrics indicate significant challenges, including a negative P/E ratio of -0.92, suggesting investor concerns about profitability. The adjusted P/E ratio for the last twelve months as of Q1 2024 stands at -1.03, reinforcing this sentiment.
InvestingPro data also reveals a Price to Book ratio of 0.61, which may signal that the stock is undervalued relative to its book value, potentially attracting value investors. However, with an Operating Income of -71.89 million USD and a Return on Assets at -62.19%, the company's financial performance raises questions about its current operational efficiency and asset utilization.
InvestingPro Tips highlight the importance of monitoring the company's next earnings date on August 8, 2024, as it could provide critical insights into AN2 Therapeutics' future prospects and impact investor sentiment. Additionally, the discrepancy between the analyst target fair value of 6 USD and InvestingPro's fair value estimate of 3.38 USD suggests a divergence in expectations, which investors should consider when evaluating the stock's potential.
For readers seeking a deeper analysis, InvestingPro offers additional insights and tips on AN2 Therapeutics. By using the coupon code PRONEWS24, readers can receive an extra 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable resources.
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