Seeking Alpha
Long only
Profile| Send Message|
( followers)  

Next week will be the most important week in the history of Titan Pharmaceuticals (OTCQB:TTNP) for investors. The company's shares are likely to see a significant move higher due to the catalyst of a March 21st FDA Psychopharmacologic Drugs Advisory Committee (PDAC) vote on whether Titan's lead drug candidate Probuphine is effective, safe, and should be approved.

While no investor can predict the future with 100% accuracy when it comes to speculative biotech investing, it is nearly certain that Probuphine will receive votes of support at next week's FDA meeting. My great confidence in Titan's bullish catalysts is because the FDA has already approved buprenorphine (the active ingredient in Probuphine) and since then buprenorphine has become the gold standard in opioid dependence treatment. Titan's Probuphine simply improves upon currently approved buprenorphine drugs by offering a zero abuse delivery system (via an implant under the skin) and a once every six month dosing regimen. This is exactly what the market (patients & doctors) and the FDA have been seeking in this area to minimize misuse and abuse.

Key Catalysts Next Week

There will be two dates to watch next week relating to Titan and the FDA. On Tuesday, March 19, the FDA is likely to release hundreds of pages of background materials to the public used by the Psychopharmacologic Drugs Advisory Committee to inform how they will vote on Titan's new drug, Probuphine, at their scheduled meeting on March 21. On Thursday, March 21, the PDAC meets to vote on whether Probuphine is effective, safe, and ready to be approved by the FDA. By 5:00 pm on March 21, investors will know the results of these votes.

To make an educated guess on what this committee may decide next week, we have been given numerous, bullish clues that point to the high likelihood of an overwhelmingly affirmative vote in support of Probuphine. Those clues include the past voting history of the Psychopharmacologic Drugs Advisory Committee, the impressive Phase III clinical trial results for Probuphine, and the current market void for an opioid dependence treatment option that is impossible to misuse or abuse.

Clue #1: Psychopharmacologic Drugs Advisory Committee's Affinity Toward Opioid Treatment Drugs

The most recent decision by the committee regarding a drug for the treatment of opioid dependence was on September 16, 2010. The drug was Vivitrol, naltrexone for extended-release injectable suspension, sponsored by Alkermes, Inc. (NASDAQ:ALKS).

Based on background material that included only one, small clinical trial conducted in Russia, the committee voted 11-2 in support of Vivitrol's effectiveness; 12-0 in support of Vivitrol's safety profile; and 12-1 in support of Vivitrol's approval by the FDA. The discussion during the meeting was overwhelmingly supportive of Vivitrol because of its trial results and the fact that there were not enough treatment options for opioid dependence currently on the market.

It is clear from the reading of the transcript of the committee's deliberations that members greatly support additional treatment options for opioid dependence which should benefit Titan's hopes for Probuphine.

Clue #2: Impressive Phase III Data on Probuphine

In contrast to Vivitrol's small, single clinical trial, Titan has conducted multiple, successful Phase III trials. In the first randomized, placebo-controlled, 163 patient trial of Probuphine, patients receiving a Probuphine implant had significantly less illicit opioid use, experienced few symptoms of withdrawal and craving, stayed in treatment longer and had greater overall improvement when compared to placebo patients.

In the subsequent, Phase III confirmatory trial, 287 patients showed statistically significant improvement in efficacy versus placebo, and non-inferiority with a currently marketed sublingual formulation of buprenorphine.

And finally, in the next retreatment Phase III trial, 85 patients were treated with Probuphine and results showed the drug to be well tolerated and patients with a high overall satisfaction with their treatment based on decreased use of illicit opioids and good control over cravings.

If the committee was convinced of efficacy and safety by the single trial of Vivitrol, then multiple, rigorous clinical trials conducted by Titan for Probuphine should similarly result in favorable votes.

Clue #3: Market Void for Probuphine Treatment Delivery System

The currently approved long term maintenance treatment options for opioid dependence include methadone, naltrexone, and buprenorphine. Although these drugs were approved by the FDA and designed to help curb addicts' cravings for illicit opioid use, they have also produced a steady, increased death rate by overdosing.

The U.S. Centers for Disease Control and Prevention (NASDAQ:CDC) reports that methadone contributed to 31.4% of opioid related deaths in the United States from 1999-2010. Methadone also accounted for 39.8% of all single-drug opioid-related deaths.

And the track record for the current pill and strip forms of buprenorphine is not much better. According to a recent Wall Street Journal article on Titan, "buprenorphine is being diverted to the black market and taken to get high." Buprenorphine is being injected and snorted to get high just like addicts do with other powerful pain killers like hydrocodone and oxycodone.

This abuse of buprenorphine is cited as the reason why Reckitt Benckiser (OTCPK:RBGPF) is voluntarily discontinuing the pill version of their drug Suboxone (a combination of buprenorphine and naloxone tablet) to instead focus solely on the sublingual film version of Suboxone. U.S. pharmaceutical sales data shows that Suboxone was the 36th highest retail sales drug in America in 2012 with nearly $1.5 billion in revenue.

Simply put, the nation's epidemic of painkiller abuse has become so complex that addicts being treated with methadone and buprenorphine are finding ways to misuse and abuse the very drugs that are supposed to cure them.

Probuphine provides a solution to this problem and a preferable treatment option because it can't be abused like methadone and Suboxone tablets and only has to be administered every six months. What an incredible market opportunity for Titan. The patient must only undergo a ten minute procedure to receive the Probuphine implant under their skin where the device then provides six months of buprenorphine released slowly, at continuous levels, through the process of dissolution. It is no wonder that the FDA already granted Probuphine a Priority Review Designation in order to advance the drug to market more quickly.

Background on Titan & Probuphine's Market Potential

Titan Pharmaceuticals, Inc. is a San Francisco based biopharmaceutical Company developing proprietary therapeutics primarily for the treatment of central nervous system ("CNS") disorders. Titan's lead product, Probuphine, is currently under review by the FDA and will receive notice of approval by April 30, 2013. On December 17, 2012, Titan signed a very lucrative $305 million partnership agreement with Apple Tree Partners (via Braeburn Pharmaceuticals) for exclusive Probuphine commercialization rights in the U.S. and Canada.

Probuphine is an investigational subcutaneous implant capable of delivering continuous and persistent, around the clock blood levels of buprenorphine for six months following a single treatment, enhancing patient compliance and retention. Buprenorphine, an approved agent for the treatment of opioid dependence, is currently available in the form of daily dosed sublingual tablets and film formulations, with reported 2012 sales of $1.5 billion in the United States. Titan estimates Probuphine sales could reach $300-500 million per year at peak.

Conclusion

Rarely in speculative biotech investing are we given such clear clues to the strong likelihood of positive FDA action on behalf of a pending, new drug candidate. Because of the FDA's affinity toward more opioid dependence treatment options, positive Phase III trial results, and the void in the market for a zero abuse formulation of buprenorphine, Titan is poised to receive favorable votes by the FDA's Psychopharmacologic Drugs Advisory Committee next week.

Opportunistic investors willing to take the risk in what is surely to be a volatile week for Titan's share price should consider establishing a position in Titan while the price is stable, under $2.00, and before the committee's background materials are released on Tuesday, March 19. You can expect trading in Titan's shares to be halted all day on March 21 while the advisory meeting is taking place. After the votes late in the afternoon (approximately 4:00 pm), trading should resume. If the votes are positive for Probuphine, the gap up from Wednesday's closing share price could be very significant. My target price for Titan to achieve in short order with favorable news is $2.50.

With shares currently trading 27% lower than recent highs of $2.53 reached just over a month ago on February 5, a very short window of opportunity is available to get discounted shares on this pre-FDA decision dip. Adding Titan exposure over the next two days to your speculative basket in your portfolio may prove to be the last time you will have a chance to buy Titan under $2.00 ever again.

Source: Titan Presents Compelling Opportunity Ahead Of PDAC Vote