3/26/2014 11:36:12 AM
New York, NY - On March 25, 2014, Taglich Brothers released an updated research report on Boston Therapeutics, Inc. (BTHE), reiterating a Speculative Buy rating with the 12-month price target lowered to $1.80 per share from $1.95 due to anticipated dilution stemming from projected financing. The report noted the following key investment considerations:
• Boston Therapeutics brings its expertise in complex carbohydrate chemistry to bear on the development and commercialization of prescription therapies and over-the-counter dietary supplements for diabetics.
• Lead product BTI320 (formerly called PAZ320) is a non-systemic enzyme inhibitor that limits after-meals glucose levels. If BTI320 clears regulatory hurdles and launches in 2017, revenue could ramp to $32 million by 2020. Preclinical work on IPOXYN, a hypoxia treatment developed for lower limb ischemia in diabetics, has been completed.
• SUGARDOWN, an over-the-counter enzyme inhibitor proven to manage after-meal glucose levels, is currently BTHE’s only commercialized product. SUGARDOWN will be available worldwide, but is limited to small scale distribution undertaken only as pre-launch missionary work for BTI320.
• In 4Q13 (results released Mar. 17, 2014) BTHE lost $2.3 million, or ($0.06) per share, on revenue of $80,000 vs. a loss of ($0.03) per share on revenue of $42,000 in the year-earlier period. We projected a loss of ($0.01) per share on revenue of $5,000. In 2013, the company lost ($0.18) per share on revenue of $323,000. We project operating losses and modest revenue (from SUGARDOWN sales) through 2017.
• In 3Q13, the company raised $4.9 million (net) in a private placement of common shares and warrants, substantially strengthening its ability to commercialize its product line. By our estimates, the company will have to raise an estimated $7 million in 2015 to cover its cash burn.
The full report can be viewed at http://www.taglichbrothers.com/equityuniverse/companies/bostontherapeutics/bostontherapeutics.aspx.
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Boston Therapeutics, Inc. (BTHE.OB), headquartered in Manchester, New Hampshire, is a development stage specialty pharmaceutical company that brings proprietary complex carbohydrate chemistry to bear on the commercialization of prescription therapies and over-the-counter dietary supplements that treat Type 2 diabetes.
Lead drug candidate PAZ320 blocks the release of glucose into the bloodstream after meals by preventing hydrolyzing enzymes from become active. IPOXYN is an injectable prescription drug candidate in preclinical development that was developed as a universal carrier of oxygen; it is being evaluated for the relief of lower-limb ischemia in diabetics. SUGARDOWN is an over-the-counter chewable dietary supplement developed to block the release of glucose into the bloodstream after meals.
SUGARDOWN, currently BTHE’s only commercialized product, is distributed on a very limited scale, serving mainly to introduce distributors to the potential benefits of PAZ320, which recently completed a phase II trial.
If PAZ320 clears regulatory hurdles, BTHE’s lead product could be commercialized by 2017. While SUGARDOWN could contribute some revenue, the company is likely to incur losses at least through 2017. Clinical studies of all of BTHE’s products are ongoing; progress is contingent on the company’s ability to raise adequate financing.
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