READ THE FULL LABT RESEARCH REPORT
We are initiating coverage of Lakewood-Amedex Biotherapeutics, Inc. (NASDAQ: LABT) with a valuation of $12.00. Lakewood-Amedex is a clinical-stage anti-infective company developing a proprietary class of antimicrobial compounds known as Bisphosphocins®. While many biotechnology companies are focused on developing incremental improvements to existing therapeutic approaches, Lakewood-Amedex is pursuing what may represent an entirely new antimicrobial class. The company’s lead candidate, Nu-3, is currently being advanced for the treatment of infected diabetic foot ulcers (iDFU), an indication where infection control remains a critical determinant of patient outcomes and where antibiotic resistance continues to complicate treatment decisions.
We believe Lakewood-Amedex occupies a unique position within the anti-infective sector. The company combines a clinical-stage lead asset addressing a significant unmet medical need with a platform technology that may have applications across multiple high-value infectious disease indications. The upcoming Phase 2a study of Nu-3 represents the next major value-creating event and has the potential to provide the first meaningful clinical validation of the Bisphosphocin platform.
A Potentially New Class of Antimicrobials: Most antimicrobial innovation over the past several decades has involved modifications of existing antibiotic classes that remain vulnerable to established resistance mechanisms. Bisphosphocins were developed as a distinct antimicrobial class and have demonstrated broad-spectrum activity against Gram-positive organisms, Gram-negative organisms, multidrug-resistant pathogens, and biofilms in preclinical studies with no indications of resistance development.
Positioned to Address One of the Largest Global Healthcare Challenges: Antimicrobial resistance continues to represent a growing public health and economic burden worldwide. The World Health Organization (WHO) has identified AMR as a major healthcare priority, while economic analyses suggest that resistance-related costs could reach trillions of dollars globally over the coming decades. Any antimicrobial platform capable of maintaining activity against resistant organisms while reducing the emergence of new resistance mechanisms would address a substantial unmet need.
Nu-3 Targets a Large and Underserved Diabetic Foot Ulcer Market: DFUs affect approximately one-third of diabetic patients during their lifetime, with roughly half of those ulcers becoming infected. Infection is one of the primary drivers of hospitalization, wound progression, and eventual amputation. Current treatment relies heavily on systemic antibiotics despite increasing concerns regarding resistant pathogens and limited tissue penetration into poorly vascularized wound environments. Nu-3’s topical administration strategy may provide an opportunity to deliver high antimicrobial concentrations directly to the site of infection while minimizing systemic exposure.
Multiple Pipeline Expansion Opportunities: Beyond diabetic foot ulcers, Lakewood-Amedex is advancing additional Bisphosphocin compounds for catheter-associated urinary tract infections and pulmonary infections. These indications represent large commercial opportunities where biofilms, resistant pathogens, and limitations of current therapies continue to create significant unmet medical needs. If the platform is validated clinically, the potential addressable market could extend far beyond the initial diabetic foot ulcer indication.
Extensive Intellectual Property Portfolio: The company has assembled a substantial intellectual property estate surrounding the Bisphosphocin platform, including composition-of-matter, formulation, and therapeutic-use patents. According to company filings, the portfolio currently consists of 71 issued patents and 28 pending patent applications worldwide, providing a potentially important competitive advantage as development progresses.
Valuation
We value Lakewood-Amedex using a probability-adjusted discounted cash flow (DCF) model that takes into account potential future revenues for Nu-3 in iDFU, which represents the most advanced asset in the pipeline, along with a modest value assigned to the broader Bisphosphocin platform to reflect the optionality associated with the company’s preclinical CAUTI and pulmonary infection programs.
Diabetes continues to be one of the fastest-growing chronic diseases worldwide, with approximately 590 million adults globally currently living with the disease, including approximately 38 million in the U.S. and over 60 million across the five largest E.U. pharmaceutical markets (France, Germany, Italy, Spain, and the U.K.) (International Diabetes Federation). A substantial proportion of diabetic patients develop foot ulcers, and published reports indicate that up to 50% of those ultimately end up becoming infected. Thus, we estimate that there are approximately one million infected diabetic foot ulcers in the U.S. each year, with a significantly larger opportunity globally.
Infected DFUs represent a significant unmet medical need due to the combination of bacterial infection, impaired wound healing, recurrent disease, hospitalization risk, and the potential risk of amputation. We believe these characteristics support a premium-priced product capable of delivering both antimicrobial activity and improved clinical outcomes.
We anticipate the Phase 2a trial of Nu-3 being conducted in 2026, followed by a larger Phase 2b trial in 2027. Assuming successful clinical development, we model a partner-sponsored Phase 3 program beginning in 2029 and extending into 2030 with the potential for regulatory approval in 2031. We believe a $1,500 treatment-course price is reasonable when compared with advanced wound-care products currently used in DFUs. Importantly, unlike wound-healing products such as Regranex®, Nu-3 is being developed specifically for infected DFUs, potentially positioning the product to address both infection management and wound healing within a patient population at elevated risk of hospitalization and amputation.
We currently model for direct commercialization in the U.S. and partnership-based commercialization internationally. We estimate peak revenues of approximately $500 million and $300 million seven years after launch in the U.S. and E.U., respectively. Using a 25% probability of success and a 12% discount rate leads to a net present value for Nu-3 in iDFU of $97 million.
While Nu-3 represents the primary driver of value today, we believe the Bisphosphocin platform possesses strategic importance beyond the lead compound. The company has generated encouraging preclinical data in catheter-associated urinary tract infections (CAUTI), pulmonary infections, and additional localized infections disease settings. While we do not assign indication-specific valuations, we assign the platform a value of $25 million to reflect future development optionality.
Combining the net present value for Nu-3 in iDFU, the platform, and the company’s current cash position leads to a net present value for Lakewood-Amedex of $130 million. Dividing by the fully diluted share count (approximately 2.8 million) plus an additional 8 million shares to account for additional financings leads to a valuation of $12 per share.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives payments totaling a maximum fee of up to $50,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.
