Repros (RPRX) saw an impressive run last month after the company announced positive topline data for its primary drug candidate Androxal. The trials have met all endpoints for safety and efficacy of the drug, bringing it very close to an approval by the FDA.
The company offers attractive opportunity for both short term and long term investors. Short term investors can play rallies from NDA filing, drug approval and market launch of Androxal.
Repros is a biotechnology company involved in the development of treatments for reproductive and hormonal system disorders. Its primary product candidate is Androxal which is a treatment for low testosterone caused by secondary hypogonadism. It is also developing Proellex for uterine fibroids and endometriosis and VASOMAX for ED (erectile dysfunction).
Repros investors have enjoyed a dream run in the last couple of years. The shares have given a return of approximately 560%, the market capitalization rising from around $50 million to $650 million. Even during the last 52 weeks, shares have risen from $8 to over $28 per share. During the last week, Repros has seen more gains due to positive topline data on its primary drug candidate Androxal.
Androxal® is the lead candidate of Repros Therapeutics developed for the treatment of secondary hypogandism. Currently, it is in phase III of development, under the guidance from the U.S. Food and Drug Administration (FDA). It is an oral medication for hypogandism, which is associated with obesity and most commonly attributed to low testosterone levels in men.
Repros expects to file for New Drug Application (NDA) with the U.S. FDA in the fourth quarter of 2014. The drug has a potential launch expected in 2015.
Androxal is a single isomer of a generic compound, clomiphene. It's an approved compound for the treatment of female fertility. Repros purified clomiphene for treating the insufficiency of testosterone in men, and secured a patent for it.
AndroGel, a product of AbbVie Inc. (ABBV), Axiron of Eli Lilly and Company, and Testim of Auxilium Pharmaceuticals are currently the only prescribed therapy for secondary hypogandism. These gel-products will prove as a competition for Androxal. However, Androxal is an oral treatment through pills, and has lower side effects.
The company has reported topline results from both the 6 month safety study and second pivotal efficacy study for its primary candidate Androxal. The study ZA-302 for efficacy met all endpoints and results were pretty similar to previously concluded study ZA-301. The FDA had asked for an efficacy level indicated by at least 75% subjects with testosterone within normal range. Results show that 81% of treated subjects had testosterone levels within normal ranges. This is a fair improvement from 79% in the previous trial ZA-301.
The data released by Repros shows that results from the safety study ZA-300 was also satisfactory. This 6-month study enrolled around 499 men out of which 28 withdrew due to adverse effects. These adverse effects include thromboembolism, upper respiratory tract infections (11.6%), headaches (6.6%), muscle spasms (4%), transient blurred vision (1.4%) and fatigue (2.8%). Only a single case of thromboembolism was detected, the only severe adverse effect of the drug. The subject in question had a family history of DVT and had been traveling extensively.
According to estimates, approximately 13 million men in the U.S. have low testosterone levels, and there is a rise in this condition. The condition is more prevalent in adult men. The obese men are more likely to experience low testosterone levels then men with normal weight. Androxal is a viable treatment for this condition, since it showed lower side effects in its trials and positive results.
The company is also considering the use of Androxal as an adjuvant therapy in patients with hypogandism and type-2 diabetes. Repros currently has an active Investigational New Drug (IND) application with FDA for this indication. The research published demonstrates that the patients with secondary hypogandism showed increased insulin resistance, a characteristic of Type 2 diabetes.
The only approved noninvasive therapy for low testosterone are hormone replacements. Androxal has benefits over hormone replacement, which include no transfer risk; not controlled substance; doesn't show withdrawal symptoms; doesn't develop dependency; and restores normal function. Hence, it has higher prospects and the launch of the drug in 2015 will be a big event.
The results of this trial have brought Repros to the cusp of filing an NDA (New Drug Application) for Androxal. The trial results show that the drug has met both efficacy and safety requirements of the FDA. Therefore, it can be safely assumed that it will be able to receive FDA approval.
The filing of the NDA and approval will result in more rallies in Repros valuations and these events offer a compelling short term investment opportunity. Long term investors should note that Androxal will be entering a market saturated with products like Eli Lilly's (LLY) Testim and Abbot's (ABT) Androgel. Despite tough competition, the sell side has a pretty optimistic view about Repros with a unanimous buy rating and a price target of $33.4 i.e. 18% upside at current levels.