MELBOURNE - Alterity Therapeutics Limited (ASX: ATH, NASDAQ: ATHE), an Australian biotech firm, has received a A$3.9 million tax refund from the Australian Taxation Office, it was announced on Tuesday. The refund, obtained through the Research and Development Tax Incentive Scheme, is for expenses related to research and development activities during the financial year ending June 30, 2023.
The company plans to allocate these funds to advance its ongoing Phase 2 clinical trials of ATH434-201 and ATH434-202, which are investigations into the treatment of Multiple System Atrophy (MSA), a Parkinsonian disorder. Additionally, the capital will support the planning of a potential Phase 3 trial, further research in neurodegenerative diseases such as Parkinson's Disease, and provide general working capital.
ATH434, Alterity's leading drug candidate, is an oral medication aimed at inhibiting protein aggregation, a common pathology in neurodegeneration. Preclinical studies have suggested that it can reduce α-synuclein pathology and maintain neuronal function by regulating iron balance in the brain. ATH434 has received Orphan drug designation from both the U.S. Food and Drug Administration and the European Commission for the treatment of MSA.
The Phase 2 trials of ATH434 include a randomized, double-blind, placebo-controlled study (ATH434-201) for patients with early-stage MSA and an open-label biomarker trial (ATH434-202) for patients with advanced stages of the disease.
Alterity Therapeutics operates out of Melbourne and San Francisco and is focused on developing treatments that modify the course of neurodegenerative diseases. The company also possesses a broad drug discovery platform that generates patentable chemical compounds targeting the underlying pathology of neurological disorders.
This financial boost is part of the Australian government's commitment to support research and innovation within the country. The information regarding this funding and Alterity Therapeutics' research initiatives is based on a press release statement.
InvestingPro Insights
Alterity Therapeutics Limited (NASDAQ: ATHE) has been making strides with its clinical trials and R&D, bolstered by a recent tax refund. A deeper dive into the company's financial health and market performance reveals a mixed picture, according to InvestingPro data and tips. With a market capitalization of just 13.7 million USD, Alterity is a relatively small player in the biotech space. The company's gross profit margin is impressive at 93.53% for the last twelve months as of Q2 2024, indicating a strong ability to control costs relative to revenue.
However, Alterity is facing challenges with a significant revenue decline of 33.38% over the same period. This is further highlighted by the company's operating income margin, which stands at -375.05%, indicating that the company's expenses far exceed its gross profit. Additionally, the stock has experienced high volatility with a 1-week price total return of 2.4%, but a 1-year price total return of -35.96%, reflecting the uncertain nature of investing in biotech firms.
InvestingPro Tips suggest that while Alterity holds more cash than debt on its balance sheet, an important indicator of financial stability, the company is quickly burning through cash. Analysts also predict a sales decline in the current year, which could be a concern for investors. However, there's a silver lining as analysts anticipate net income growth this year, and the company's liquid assets exceed short-term obligations, providing some cushion against financial headwinds.
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