Company Brief Update - MBP - Metabolic

Company Brief Update - MBP - Metabolic

Team score of at least 4.0.

MBP has been severely (overly) punished for the failure of efficacy of its obesity drugs. For the company's point of view that the Ph IIB Options Study on the obesity drug has not shown commercial viability, is positive hence saving cost of Ph III and enable the company to focus on other drug candidates in the pipeline. The company notes that the trial of the obesity drug was "completed on time" and "within budget".

Recently, MBP shares were bought at much higher price in the capital raising - 14.6m shares for $0.72 each and 316,000 options for $0.55. Compare this with today's price of $0.15

Much of its assets are in cash - about $24m left in Feb 2007. Its Dec06 half year loss of $8.8m is high (due to extensive clinical trials) but not likely for the current half. Current cash levels can sustain at least 18 months. Price to NTA is currently about 2 times.

Products on the pipeline in include ACV1 for neuropathic pain, oral peptide delivery platform and animal studies of AOD9604 for osteoporosis. The most advanced in the pipeline is ACV1 with two Ph IIA studies commenced which targets sciatic, diabetic and post-herpetic neuralgia neuropathic pain. A successful Ph I Extension study has also shown ACV1 can be tolerated at higher doses.

Expect the first Ph IIA study of ACV1 to be compeleted soon (by mid year) and the second study to complete by early 2008.

Recommendation: Buy up to 20c. Expect 25c at successful Ph IIA study by June. Expect 30c on further positive news by Dec 07.