AB Science: Maxim Group Maintains Buy Rating with a Target of €4 per Share
Maxim Group reaffirmed its buy recommendation for AB Science on Monday, with a target price of €4.00 per share. The analysis report, published on May 21, highlights the impact of the €25 million insurance taken out in April to cover risks associated with the phase 3 trial of masitinib in ALS.
Clinical Insurance Reduces Investment Risk
Maxim Group, an American investment banking services firm, pointed out that the clinical trial insurance policy (€25 million, extendable to €39 million) acts as a put option for investors. Although a premium of €8 million is required, this protection provides coverage in case of trial failure, potentially allowing for the recovery of the initial investment up to the cost of the trial. This mechanism makes the financing opportunity for phase 3 of masitinib more attractive by significantly reducing the risk for existing and potential investors, according to the analyst.
Strategic Refocus on Two Priority Indications
AB Science has voluntarily suspended all its clinical trials and developments except for those in ALS and acute myeloid leukemia (AML) in order to focus its resources on these two programs. Maxim Group believes that this strategy should reduce operating costs while accelerating the development of molecules considered most promising. For ALS, masitinib has demonstrated functional and survival benefits with a satisfactory tolerance profile, while the molecule has generated positive results in three neurodegenerative indications (ALS, MS, Alzheimer's disease), validating the analyst's approach to mast cell inhibition.
