Seeking Alpha
Long/short equity, contrarian
Profile| Send Message|
( followers)  

As Avanir's (NASDAQ:AVNR) February 2011 commercial launch of Nuedexta fast approaches, the company seems to be well positioned to hit the ground running. Avanir's recently assembled yet experienced sales force seems to be congealing nicely, as evidenced by some of the posts by its members on the Avanir specific message board at CafePharma.com, a forum in which employees of pharma companies may anonymously share sentiment and concerns (and generally vent) with regard to their respective employers.

Nuedexta has been confirmed to be in the drug data bases of many major pharmacies, such as CVS, and will soon be ready for distribution. Additionally, major group and individual health plans have already quoted co-pay pricing for Nuedexta. My Blue Cross HMO plan gave a co-pay quote of $60 for a three month supply (90 pills). Another traders plan gave a quote of $340 for a three month supply. I would imagine most plans will land somewhere in between. A small price to pay when one considers the debilitating effect PBA has on one's social/family life.

On a related note, a new survey was recently released (presumably in effort to create PBA awareness) detailing data concerning the aforementioned debilitating impact of PBA (see here).

Avanir has yet to tip their hand concerning plans to seek EMA approval, nor have they provided any updates since their 11/01/10 conference call concerning talks with potential EU partners. Avanir has not yet responded to my recent inquiries into such. There has been healthy debate among investors as to which Avanir should pursue first, EU approval or an EU partnership. Whichever Avanir decides, the news would certainly give Avanir's share price a boost, if Nuedexta's US sales doesn't do that first.

It is becoming evident that the market for Avanir's drug and/or the companys ability to deliver on sales are currently being underestimated by analysts and Wall Street alike as Avanir closed yesterdays regular trading session at $4.26, which is just above it's 50 day EMA and nearly 27% below it's 52 week high. I suspect Wall Street's general "show me the money" sentiment towards Avanir will change once institutions and hedge funds begin tracking Nuedexta's weekly prescription data.

With plenty of cash on hand, no competition, new indications to pursue, and a pipeline to develop, Avanir appears to be in the driver's seat and in complete control. Provided that their sales and marketing strategies are well executed, there seems to be little to prevent them from becoming a successful commercial enterprise and providing shareholder value for years to come.

For more information on PBA, see here.

Source: Avanir Pharmaceuticals Poised for a Strong New Drug Launch