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The pharmaceutical industry remains extremely interested in female sexual dysfunction, primarily due to the enormous revenues that could be generated from this untapped US market.
From our last note on FSD (link):
Female Sexual Dysfunction (FSD) is often overshadowed by the more prominent erectile dysfunction market. While companies like Pfizer (NYSE: PFE) recruit the likes of Bob Dole and other prominent celebrities to help push Viagra, the attention on FSD has been lacking to say the least. This obscures an analysis of a National Health and Social Life Survey performed six years before initial FDA approval of Viagra which estimated that 43% of women suffer from symptoms of FSD. This and other studies imply that there is indeed a vast and significant unmet need for FSD treatments that needs to be addressed to improve the wellbeing of millions of women. In addition to this, there is a huge and untapped therapeutic market that offers a multi-billion opportunity (mimicking the size and scope of the Viagra/Cialis market) for drug developers and their investors.
Although generic competition has arrived, we can say that the Viagra/Cialis market is at least $2 B in size. $3-4 B may be more appropriate, heavily depending on the pricing of any mainstream FSD therapies that could be approved in the United States.
For now testosterone treatment for FDS can be available off-label, but progress towards an FDA-approved FSD testosterone product has been weak:
Recall the transdermal testosterone patch Intrinsa, was not successful at obtaining FDA approval after successful clinical development. Intrinsa did not have efficacy problems, although the FDA was very against its approval due to abuse potential and other safety concerns.
Also recall the testosterone product called Libigel, which was being developed by BioSante Pharmaceuticals (its ticker was "BPAX") until the product failed to achieve statistically significant improvements in Phase III trials. The results of this trial were quite upsetting and controversial for most investors, largely part due to the surprisingly positive performance in the placebo arm. Note that this, plus multiple investor lawsuits, eventually led to Biosante's merger with generic manufacturer ANI Pharmaceuticals (ANIP).
Testosterone products are approved in other countries for FSD, although it seems that non-hormonal therapy may be the first to officially hit the United States. Current non-hormonal drug developers targeting FSD are also "under-the-radar" for the time being, making them interesting considerations for special situation and value investors.
Osphena - Shionogi
Osphena (Ospemifene) is a selective estrogen receptor modulator (SERM) drug developed by Japanese pharmaceutical company Shionogi & Co (OTC:SGIOF) that was approved earlier this year, although it is specifically used for women who experience pain during sex (dyspareunia). This is an effect of vaginal dryness, which is frequent in menopausal women who have lower estrogen levels. Osphena helps to rebuild the actual thickness of the vaginal wall without direct use of estrogen, which is novel.
Although it is efficacious, Osphena has some major drawbacks with regards to its safety and use. Uncommon and possible side effects of the drug include stroke, blood clots, and endometrial cancer (cancer of the uterus). Common side effects include hot flashes, discharge, muscle spams, and increased sweating. While this therapy may replace standard estrogen therapy, it is dangerous. In addition, it is far from an equivalent to "female Viagra".
Flibanserin - Sprout
The original attempt at female Viagra was with Flibanserin by Boehringer Ingelheim. The drug failed from an efficacy standpoint, and is now controlled by a very new private entity called Sprout Pharmaceuticals (an offshoot of Slate Pharmaceuticals). The company has already submitted an NDA, and expects a response before the end of 2013.
Bremelanotide - Palatin
Palatin (PTN) recently completed end-of-phase II meetings with the FDA, and has reached preliminary agreement on key aspects of the Phase III pivotal trial. This includes the FSD patient population, the primary and key secondary efficacy endpoints, design, dosing, and safety monitoring. Since the FDA has been hard on efficacy data presented for the FSD indication, it's encouraging to hear their close involvement with the design of bremelanotide's pivotal trial.
Phase II data and discussion from a previous note (link):
The Company is testing bremelanotide, a peptide melanocortin receptor agonist, in patients with FSD. Bremalanotide works via activation of melanocortin receptors in the central nervous system, and is intended for on-demand use approximately an hour prior to anticipated sexual activity. In the first quarter of 2013, Palatin released top-line data for their Phase IIb, at-home clinical trial in patients with female sexual dysfunction.
The trial hit on the primary and key secondary endpoints, a major success, demonstrating a good safety profile for bremalanotide and statistically significant increases in the number of Satisfying Sexual Events (SSE) versus placebo. The most common adverse reactions with incidence over 5% among bremalanotide users at any dose included nausea, flushing, and headache. The FDA approved a Phase III trial design with bremalanotide, and the Company could start the trial as early as Q4 2013.
The drug's safety and tolerability has been adequate up to this point, and should be adequate for approval after the trial. This is because the cardiovascular risk concerns will be studied closely through patient blood pressure monitoring.
The FDA is expected to finalize the design of the trial before the end of the year. Patient screening is also expected to start before the end of the year. Official estimates for interim data aren't available, although the conclusion of the enrollment process should give us a lot more to work with. Investor attention is expected to increase significantly as we approach potential data releases for the pivotal trials, since they will be major catalysts for shares of PTN.
Femprox - Apricus
Femprox is a Prostaglandin Ei (alprostadil) cream being developed by Apricus Biosciences (APRI) that passed its first Phase III trial and has yet to start its pivotal Phase III trial. The first Phase III trial consisted of over 400 patients in China, and application of the cream was not performed in the clinic. Primary and secondary efficacy endpoints were achieved with statistical significance. A foreign trial may mean these data may be deemed less reliable when the FDA performs its review. This may put more weight on the pivotal trial, which investors are eagerly anticipating.
Notes on Biotech Risk:
Investors should realize that unprofitable biotechnology companies in the development stage experience particularly high volatility, are speculative, and do hold significant risk for loss of wealth. Investors believe that the company's valuation will increase more over time than the rate at which the company will burn cash, which is why the high risks are taken.