Halister News

(Bloomberg) -- A period of doubt opens up and AB Science stock could “durably” suffer from market skepticism as it’s clear mastocytosis treatment won’t be authorized in Europe, Oddo & Cie analyst Sebastien Malafosse writes in note.

• Cuts rating to ‘reduce’ from ‘buy,’ PT to EU5 from EU48
• NOTE: French national medicine agency requested AB Science temporarily suspends masitinib clinical studies
  • AB Science shares suspended in Paris at co.’s request, closed at EU15.39 on Thursday, down 6.4%
• It won’t be enough to secure another green light from ANSM, it will also have to motivate patients and investigators to pursue trials
• Valuation based on ALS indication alone of EU6.2 presents no real upside, net cash -EU1.2/share, so co. is worth only EU5/shr
• In separate note Kepler Cheuvreux analyst Arsene Guekam says to expect a “massive” valuation impact
• Puts rating and PT under review (from previously EU27)
• Expect negative EMA decision next week on mastocytosis; decision on ALS indication will depend on co.’s ability to demonstrate that new procedures implemented since 2015 comply with good clinical practices and pharmacovigilance procedures
• In a best-case scenario valuation impact will rely on delay of approval in mastocytosis
• In a less favorable case, 2 issues may arise: other regulators’ decisions on masitinib and ANSM can keep its decision despite audit
  • Says masitinib project would be dead in this case