Anatara Lifesciences share price collapses after unveiling once-confidential details of Zoetis deal

Qld biotechnology company loses 40% of its value in 2 days, after finally divulging details of a poo-drug deal that left investors underwhelmed.

Anatara Lifesciences had been targeting diarrhoea in livestock such as pigs.

• Qld biotech earnings 2018

QUEENSLAND drug-developer Anatara Lifesciences has lost almost 40 per cent of its value in two days, after finally divulging details of a big-pharma deal that left investors underwhelmed.

Anatara is developing a drug, derived from pineapple stems, to combat diarrhoea that has been initially targeted at pigs and other livestock.

Earlier this week the company said it had notched a worldwide development and marketing deal for livestock and horses with New Jersey-based Zoetis — the details were marked confidential but shares jumped 17.5c to $1.62.

A day later, Anatara backflipped and divulged the details, showing an upfront payment was $US2.5 million ($A3.32 million) — but $2 million of that had already been paid since Zoetis started investigating a deal with their drug years ago. Other payments include $6.3 million for sales milestones, most of which are undisclosed, and royalties on sales of between 3 per cent and 4 per cent.

“The market doesn’t like the deal because it’s not a big deal,” Bioshares analyst David Blake said.

The deal was small but “consistent with the type of deals that are done in the veterinary and animal health space”.

Mr Blake said questions remained about what animals Zoetis would look at, and why Anatara had backtracked on the confidentiality surrounding the deal.

Shares closed down at 94.5c on Thursday, and cutting the market capitalisation from $80 million earlier this week to $47 million.

Anatara chief executive officer Mel Bridges also announced he was standing down on Thursday. Dr Bridges, a veteran of the biotechnology sector, said his most recent experience was in animal health so a change was due with the company now to focus on products for humans.

He has interests in almost 5.9 million shares, or roughly 12 per cent of Anatara. Attempts to obtain comment from Dr Bridges were unsuccessful.