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Intellipharmaceutics (NASDAQ:IPCI) is a biotech company specializing in the development and manufacturing of generic and novel drugs as well as proprietary drug delivery systems. The company's strategy in the pharmaceutical space is to turn currently marketed drugs that are developed for immediate release into patentable extended release drugs. The company is also currently working on new drug delivery technologies which could attain a large value if successfully brought to market. In this article we'll take a look at IPCI's current pipeline, platforms and finances to gauge where this company could be in the short to long term.

The Pipeline

The most significant factor in regards to IPCI may be the fact that they currently have 8 FDA ANDA filings for generic once a day drugs. This to me is a clear sign that the company may be reaching a massive inflexion point in the short term. The total market size being entered by IPCI's 8 candidates is a combined estimated $4.7B. In terms of IPCI's clinical phase candidates the company has completed a Phase I study for their Pregabalin drug to treat neuropathic pain and has also completed a Phase I study for their Oxycodone extended release candidate. Below is a view of the company's current pipeline.


(Click to enlarge)

Drug Delivery Technologies

In addition to IPCI's large pipeline, another venture the company is developing with a huge market potential is their drug abuse deterring technology platform, Rexista™. The function of this technology is to create drugs which cannot be abused by the user (crushing, shooting, dose dumping etc). The company's first drug being paired with this technology is its Oxycodone CR candidate approaching Phase II. Being that IPCI's technology platforms are novel with over 30+ patents pending and issued, I see an extremely large market opportunity for licensing and new improved drug candidates if the technology continues to show effectiveness. This past Monday IPCI gave an update on its Rexista™ development program and revealed that current results suggest that Rexista™ when paired with IPCI's Oxycodone does not interfere with the drugs bioavailability and promoted the drugs stability. The company stated that per these new results they now plan to seek "Special Protocol Assessment" from the FDA which would assist the company in conducting a Phase III trial and subsequent NDA filing. The company states they plan to seek a licensing partner for this Phase III trial and aim to initiate it in the first half of 2014.

Financials + Analysts

Since IPCI is a development stage company with no products on the market yet, a history of negative earnings can be found on their balance sheet. The company's net loss so far this year for the 6 months ended May 31, 2013 has been $3.1M. As of this time the company also reported having $1.6M in cash and cash equivalents. Being that the company's current burn rate appears to be in the range of $1.5M per quarter there exists a possibility that the company may have to dilute via a new offering in the future. IPCI's management however is clearly looking to avoid diluting shareholders based on the fact that insiders currently own 35% of IPCI's shares. Furthermore, the company has done a good job at managing and conserving cash prior to catalysts in the past which gives me an added confidence in the chances of non-dilution. In terms of market sentiment there are currently 5 analysts covering IPCI with 2 "strong buy" recommendations and 3 "buy" recommendations with a $7 median price target. The most recent buy rating was given this week by Brean Capital LLC, with a price target of $7.00.

Conclusion

In looking at IPCI's large pipeline of drugs close to approval, it is safe to say that even if a few drugs do not make it to market there is still a high chance of company profitability in time based on the sheer number of drugs up for review alone. While IPCI does not have any blockbuster candidates up for approval presently, the markets which the company is aiming to enter still hold significant value when combined. IPCI's recent Phase I completed Oxycodone CR candidate does however seem to hold potential blockbuster status if it continues to show safety and efficacy throughout future clinical trials. I would look for IPCI to be a strong up and coming player in the generic space which could give current generic pharmas a run for their money.

Source: Intellipharmaceutics: A Bio-Better Generics Play On The Cutting Edge