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On Monday, JMP Securities adjusted its outlook for AN2 Therapeutics (NASDAQ:ANTX), reducing the price target from $5.00 to $2.00, yet maintaining a Market Outperform rating. Currently trading at $1.22, ANTX sits between its 52-week range of $0.87 to $3.07, with a market capitalization of $36.7 million. This adjustment follows the recent announcement from AN2 Therapeutics that the Phase 3 segment of their EBO-301 Phase 2/3 trial, which was testing oral epetraborole for refractory MAC NTM lung disease, did not meet the primary endpoint. Consequently, the company has decided to halt development of oral epetraborole for MAC NTM treatment.
The company’s management has expressed intentions to redirect their focus towards other potential uses of epetraborole, specifically for M. abscessus (MAB) NTM and intravenous applications for melioidosis. According to InvestingPro data, the company maintains a strong current ratio of 8.43, suggesting ample liquidity to pursue these alternatives. Despite the setback with the MAC NTM indication, JMP Securities remains optimistic about AN2 Therapeutics’ boron-chemistry platform and the preclinical activity of several compounds in the pipeline.
JMP Securities expressed disappointment over the failure to meet the primary endpoint in the MAC NTM trial but still sees value in the company’s technology platform. The firm’s revised valuation is based on the projected year-end 2025 cash, estimated at $1.57 per fully diluted share, combined with a platform value of $0.70 per share. This valuation hinges on further advancements in the pipeline, which currently includes early-stage projects and indications such as Chagas disease that lack established commercial precedent.
The decision to discontinue oral epetraborole for MAC NTM is part of AN2 Therapeutics’ strategic realignment towards the remaining pipeline, supported by approximately three years of cash runway. As the company navigates this transition, JMP Securities’ revised price target reflects a cautious yet still positive outlook on AN2 Therapeutics’ future prospects.
In other recent news, AN2 Therapeutics reported a significant setback as its Phase 3 study of epetraborole for MAC lung disease failed to meet the primary endpoint, raising concerns about the drug’s efficacy. Despite this, the company continues to focus on its boron chemistry pipeline and has plans for a Phase 1 study of a treatment for chronic Chagas disease, with completion expected in 2025. Additionally, AN2 Therapeutics anticipates topline data from an observational trial for melioidosis in 2025, followed by a Phase 2 study aimed at reducing mortality rates. JMP Securities has maintained a Market Outperform rating and a $5.00 price target on AN2 Therapeutics, reflecting confidence in the potential market opportunity for epetraborole, which could exceed $1 billion. The company concluded the fiscal year with approximately $89 million in cash reserves, projecting sustainability through 2027. AN2 Therapeutics has also amended its statistical analysis plan for the Phase 3 EBO-301 trial, designating the QOL-B patient-reported outcome as the primary efficacy endpoint, aligning with FDA guidance. Dr. Stephen Ruoss, a key opinion leader, expressed optimism about the patient-reported outcome efficacy results of epetraborole, reinforcing JMP Securities’ positive outlook. The company is preparing to unblind and discuss the Phase 3 data with the FDA in 2025, exploring potential registration pathways for epetraborole in treating refractory NTM lung disease.
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