Frost & Sullivan Publishes Update Coverage Report on DNA Biomedical Solutions Ltd.: Preparations for pre-IND (505(b) (2) submission and expected capital raising by Entera; BeamMed retains a similar sales rate with a growing presence in the US; Target price remains unchanged.

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Apr 12, 2018, 06:20 ET

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Summary of Highlights

DNA released its annual report for 2017 detailing the following: Entera Bio continues its efforts to raise capital; and plans to submit a pre-IND to the FDA (505(b) (2) regulatory path) for the EB613.
At December 31, 2017 Entera had an operating loss of approximately $11.3M, an increase of approx. $6M compared to 2016, which occurred due to the costs of registration to the NASDAQ and related expenses.
On January 26, 2018, Entera Bio informed DNA that it had not completed the process of issuing and listing the shares for trading as it had planned. In our opinion, the effect of the non-completed offering on Entera's development plans is immaterial.
Entera also plans to submit a pre-IND to the FDA to be considered under the 505(b) (2) regulatory pathway for EB613. If Entera will receive FDA approval, it will have a significant positive effect on the drug's time to market. Currently, the Company is expected to initiate Phase 2b/3 trials, with their EB612 PTH 1-34 for hypoparathyroidism in H2-2018.
Financially, it should be noted that Entera recently completed a $13M financing round, and therefore, in our opinion, at present, the Company has sufficient funding to complete the necessary preparations prior to initiating the aforementioned experiments.
At the same time, we expect Entera to try and raise public and/or private capital in the coming months. If Entera raises sufficient capital, there should be no delay in its clinical development program.
BeamMed retained its sales pace, with a key focus on penetrating the US market: Revenues totaled NIS 12M at December 31, 2017, similar to 2016, with a high proportion of sales coming from Asia, and NIS 900K from the US.
BeamMed's sales show a certain change in the sales mix with sales growing in the USA compared to 2016; Sales and marketing expenses for 2017 increased by NIS 200,000 from 2016.
We keep DNA's value at approximately $30.9 million (NIS 108.7M) corresponding to a target price of $0.23 (NIS 0.79) per share.

About the company - Israeli holdings firm DNA Biomedical Solutions Ltd. was founded in 2004 and went public on the Tel Aviv Stock Exchange in 2007. DNA has two key holdings, respective 35% and 40% stakes (both fully diluted) in biomedical companies - Entera Bio and BeamMed.

Entera Bio Ltd. is a drug development company, founded in 2009 by DNA and Oramed the latter from whom it has licensed a unique drug delivery platform for oral administration of pharmaceutically active large molecule proteins that are nowadays injected. Entera is conducting clinical trials for two candidate drugs treating three indications: hypoparathyroidism, osteoporosis, and non-union fractures.

BeamMed Ltd. and its global subsidiaries, are medical device companies that deliver an ultrasound based screening solution for determining a patient's risk of developing osteoporosis, with unique additional product features. Please click here (https://ww2.frost.com/research/equity-research/)

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SOURCE Frost & Sullivan