Titan Pharmaceutical: More Likely Buyout Target as Patent Protection Is Approved

Dec. 2.09 | About: Titan Pharmaceuticals, (TTNP)

Titan Pharmaceuticals (NASDAQ:TTNP) announced on Monday that the company had received confirmation from the United States Patent and Trademark Office [USPTO] that a Notice of Allowance had been issued for Probuphine for the treatment of Opiate addiction.

This news has been long awaited and heavily anticipated by both the company and its investors, although the share price of the TTNP stock remained flat after an initial post-announcement spike.

It's been no secret that I believe that Titan will eventually be purchased, probably by Novartis (NYSE:NVS) in my opinion, and the fact that Titan President Sunil Bhonsle stated in the PR that "This represents an important element for establishing the long term value of Probuphine" only fuels my speculation of a buyout. The outcome of the patent issue could have been all that a potential buyer was waiting on because now that potential buyer knows that they will have Probuphine patent protection for the opiate indication until 2023.

Buyout or not, however, TTNP is still undervalued, in my opinion, especially after the Probuphine patent announcement.

Royalties from sales of Vanda's (NASDAQ:VNDA) Fanapt are imminent and the Probuphine Phase III 'confirmatory trial' will be funded by a $7.6 million grant from the NIH; combine that with the potential of Probuphine for the treatment of chronic pain and we've got a stock that still has room to grow over the long term - although some of that long term potential disappears if the company is in fact bought out; TTNP would then become a short term winner.

Buyout or not, it's my opinion that investors of TTNP are still set to be well rewarded.

Disclosure: VFC is long TTNP.