Antares: Challenger Emerging Against 400-Year Old Condom

| About: Antares Pharma (ATRS)

Last year Endocrine Society held its 94th annual meeting (ENDO-2012) on June 23-26 in Houston, TX. One of the presentations made on Sunday June 24th was on male birth control and entitled "A new combination of testosterone and Nestorone transdermal gels for male hormonal contraception". Endocrine Society published a public release of this sensational news the next day, which was picked up very heavily by the national news media in the following days; e.g., LA Times on June 26th, CBS on June 29th, NBC on July 2nd, and ABC on July 12th etc. On top of national news media coverage, news-portals geared for investment community also picked up the story, since such a product has mass market and investment appeal. Wall Street Daily reported the story "there's no question that something like this will fly off the shelves - and become part of everyday life - once it gets official… since this is being developed in a lab at UCLA, there's no way to invest at this time" referring to the transdermal gel presented at ENDO-2012. Although there was no mention of Antares Pharma (NASDAQ:ATRS) in those news releases, some investors speculated that it might be Antares's ATD technology being used for the transdermal gel as it was well-known that Antares and Population Council have been collaborating on developing a female (not male) birth control gel using Nestorone and estradiol using Antares's ATD gel technology. In the 10 trading days following the original presentation ATRS share price went parabolically higher jumping from $3.54 to a high of $5.25.

As it was revealed several months later in a peer-reviewed academic journal publication by the same UCLA researchers, the ENDO-2012 study indeed used Nestorone gel produced by Antares Pharma. The publication was a journal version of the same ENDO-2012 study and the authors confirmed the speculation by making the following statement: "…Nestorone and placebo gels were produced by Antares Pharma". The journal's full text articles are only accessible through a paid subscription and its target audience is academic and medical professionals; not investment community. It is clear that Population Council is involved with UCLA researchers in developing the male birth control gel as the summary version of the journal publication is also posted on the Population Council's own website. Having established the link between Antares and male birth control gel through Population Council, now we can discuss how this year's ENDO meeting can serve as a catalyst for Antares Pharma as we review the background and the progress that has been made by the same research group since ENDO-2012.

This year's ENDO Annual meeting (ENDO-2013) will be held on June 15-18 in San Francisco. Great news is that the same group of researchers is scheduled to make a presentation on June 16th, Sunday; again discussing their recent progress on Nestorone gel being used in male birth control. This year's presentation might create a similar excitement if the new research shows that Nestorone gel is one step closer to commercial reality along with a debate on clinical trials to submit an NDA to the FDA. Although this research is currently being conducted by academics in collaboration with Population Council it is deemed to be a strong candidate with commercial viability. James Dalton, chief scientific officer at GTx Inc., a biopharmaceutical firm in Memphis, corroborates the commercial viability of the transdermal gel when he briefed on the ENDO-2012 study: "The use of transdermal gels for male contraception is a potentially meaningful advance compared to the prior approaches, which required intramuscular injection". The attractiveness of this male contraceptive against other alternatives under academic studies is explained by the lead study researcher of the ENDO-2012 presentation: "Men can use transdermal gels at home - unlike the usual injections and implants, which must be given in a healthcare provider's office"

According to Antares official documents Antares has a joint development agreement with the Population Council (PC), to develop a contraceptive gel product for females containing Nestorone (PC's patented compound) and Antares's Advanced Transdermal Delivery (ATD™) gel system. Please note that official documents from Antares have no mention of the male birth control gel; but, the journal version of the ENDO-2012 research lists Antares Pharma as the supplier of the Nestorone gel used in male birth control product. My interpretation is that PC uses the Antares-supplied-Nestorone gel to progress both the female and male contraception projects. As we review in the next section, the female version is closer to being a commercial product since it recently completed Phase II clinical trials; whereas the male version is still undergoing clinical studies driven by PC. Furthermore, the very original partnership agreement between Antares and PC states that under the terms of their agreement certain hormonal contraceptives can be developed as male birth control products. When discussing their partnership with PC, Antares only mentions the female birth control gel which uses Nestorone and a form of estrogen, called 17Beta estradiol. Note that the male birth control gel uses Nestorone and testosterone; so Nestorone is common in both gels.

Before discussing the male version of the gel, it would be helpful to review the partnership between Antares and PC on the female birth control gel. According to Population Council, the formulation which uses Nestorone and estradiol is used for female contraception. Although not active orally, clinical studies have shown that when delivered to the skin Nestorone® is highly effective at stopping ovulation at low doses and has a good safety profile, with no androgenic hormonal side effects. The novel combination of Nestorone® and estradiol has five significant advantages over the traditional female contraception products:

  1. Better safety profile compared to commonly-used hormonal contraceptives. When delivered by the transdermal route, Estradiol has the advantage of being a much less potent estrogen than the commonly used contraceptives and therefore may have a lower risk of causing blood clots within a vein.
  2. Nestorone has no androgenic hormonal activity and therefore its use results in fewer side effects (e.g. acne, weight gain, and altered cholesterol levels)
  3. Nestorone is particularly applicable for use in women who are breastfeeding. Indeed, previous studies of breastfeeding women using Nestorone delivered via implants did not show any health impact on the infants.
  4. Effective, easy-to-use method of contraception requiring once-daily application of gel to the skin. Antares's ATD™ gel formulations are easy to use, unscented, clear and cosmetically acceptable.
  5. A key benefit of ATD™ gels is their excellent local skin tolerance offering a particular advantage over transdermal patch systems, which frequently cause local skin irritation at the application site.

Clinical development status of this female version is that Antares and PC announced successful results from a dose-finding Phase II trial; and currently they are working together to identify a worldwide or regional commercial development partner to complete the development of this product. If completed successfully this female birth control gel has blockbuster potential for Antares as the global market for systemic hormonal contraceptives is US$9 billion according to a recent report from Datamonitor; and this Nestorone gel has clear competitive advantages against what is currently available for female contraception.

Now, let's turn our attention to the male birth control gel and discuss why ENDO-2013 presentation is a potential catalyst for Antares. ENDO-2013 presentation is entitled "Gonadotropin Suppression Predicts Suppression of Spermatogenesis in Men Applying Transdermal Testosterone and Nestorone TM Gels for Male Hormonal Contraception". There are several reasons as to why this is a significant catalyst for Antares's longer term prospects:

1. This year's presentation shows that the same researchers are still actively working on developing a male birth control gel, which in itself is sensational news because while women have had access to hormone-based contraceptives for decades, condoms and vasectomy have remained the only commercially available contraception options for men. CBS reported about ENDO-2012 presentation by quoting the lead researcher of the study: "Up until now, the responsibility for contraception has traditionally always been with the female. With these new contraceptive methods for males, the responsibility will be shared". The title of the ENDO-2013 presentation suggests that researchers made progress into the mechanism of action. Spermatogenesis is the process by which sperm develops to become mature sperm, capable of fertilizing an ovum. Gonadotropins are protein hormones that regulate sexual development and reproductive function. The title suggests that the male birth control gel suppresses gonadotropins, which in turn suppresses the sperm formation; and, thus, this gel is an effective male birth control product. With a clear mechanism of action established for the Nestorone gel the researchers' next step is to design large clinical trials to be used in seeking an FDA approval.

2. Unlike other progestins studied as male contraceptives, Nestorone has no androgenic activity and the associated side effects such as acne and changes in cholesterol.

3. According to the lead researcher of the project men can use transdermal gels at home - unlike the usual injections and implants, which must be given in a health care provider's office

4. This particular formulation is the first time that a combination of testosterone and a synthetic progestin (i.e., Nestorone) has been tested as a gel that could be applied topically. Previous research involved administering the combination by injection or via a patch, which are both commercially challenged.

5. Government is interested in having this product progressed as evidenced by the fact that U.S. National Institutes of Child Health and Human Development funded the research presented at ENDO-2012.

Progress Since ENDO-2012 on Male Birth Control Gel

My due diligence shows that the study which was presented at ENDO-2012 used separate gels for testosterone and Nestorone each applied at different parts of the body. When covering the ENDO-2012 study US News reported that the transdermal gel was applied in two spots; the testosterone component on the arm and the Nestorone component on the abdomen. In fact, this was seen as one of the improvement opportunities of the ENDO-2012 study. In its coverage of the ENDO-2012 study Science News highlighted this possible next step: "Large-scale testing of a single, combined gel - possibly with lower doses of testosterone - will be needed to get regulatory approval for the drug combination." It is very encouraging that the same research group indeed acted on this next logical step by designing a combined gel of Nestorone and testosterone; and already conducted a randomized, double-blind, comparator clinical trial; whose results have been published in the February 2013 issue of Obstetrical & Gynecological Survey. In this trial, researchers compared the effectiveness of the combined gel against the testosterone gel alone in suppressing sperm formation. The data showed that the percentage of men whose sperm concentration is suppressed was significantly higher in the combined gel treatment arms establishing the efficacy of the combined gel in suppressing the sperm formation with no serious adverse side effects. Now that the combined gel is developed and shown to have efficacy, I am expecting that the next step is to design a large clinical study under FDA guidance.

One of the researchers who has been involved both in the 2012 and 2013 studies writes that the development of a male contraceptive would offer a "monumental improvement in reproductive choices for both men and women". In her excellent report published by the American Medical Association Journal of Ethics, she continues "while many options have been tested, no pharmaceutical company has applied to the Food and Drug Administration for permission to bring any of those regimens to market. ..the potential is promising, but further research including larger phase III trials and more exploration of potential long-term risks needs to be pursued.", which I completely agree as the next steps.

I will be waiting for the ENDO-2013 presentation on June 16 to better understand what progress has been made on this little known but potentially sensational drug candidate for male birth control. It will be interesting to see if ENDO-2013 presentation will create similar levels of national news media coverage like what we had with ENDO-2012 study. Although reversible contraceptive options for females have been widespread including pills, patches, injections, and intrauterine devices, no reversible contraceptive options became available for men since the development of condoms over 400 years ago. Although still in clinical development the Nestorone transdermal gel is promising as a commercially viable male contraception method challenging condoms and vasectomy. Despite the fact there are many other reasons to invest in Antares Pharma with the most immediate and significant one being the Otrexup potential (PDUFA date Oct 14, 2013), which is covered separately, male birth control gel serves as a speculative, longer-term catalyst based on the above due diligence.

Acknowledgement: Part of the due diligence used in this article has been conducted by an avid reader of my Seeking Alpha articles, who provides his commentary on Antares related articles under the pen name Loko (LD); and he himself is a scientist with several patents under his name. His excellent due diligence is greatly appreciated.

Disclosure: I am long ATRS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is intended for informational use only, and should not be construed as professional investment advice. They are my opinions only. Nothing in this article should be taken as a solicitation to purchase or sell securities.