Keep an Eye on Titan Pharmaceuticals

May.22.11 | About: Titan Pharmaceuticals, (TTNP)

Titan Pharmaceuticals (NASDAQ:TTNP) traded more than 400,000 shares on Wednesday, well more than the daily normal trading average and accompanied by a five percent price spike.

Of those shares that traded in the significant late-day volume, the vast majority of them switched hands during the last half hour of the trading day.

A recent run in price brought Titan back to the $1.60 range, but the run stalled for a period of consolidation, but if Wednesday's action is any indication, then a trip towards - or past - the two dollar mark may be in the works.

Of note, the quarterly conference call is scheduled for Thursday morning, so Wednesday's late day push could have been in anticipation of a possible early-Thursday news release, either before or in conjunction with the conference call.

According to the quarterly report filed earlier in the week, Titan is set to announce the results of the confirmatory Phase III Probuphine trial by the end of the second quarter.

Could those results be pending for this conference call? Some investors may be betting on it.

The results from previous Probuphine trials have been encouraging, so it's expected that Titan will announce positive results. What has been uncertain, however, is how Titan will fund a possible commercial launch, if it were to receive FDA approval.

Some of that uncertainty is alleviated by the royalty revenue for Fanapt sales, a product developed by Vanda (NASDAQ:VNDA) and licensed to Novartis (NYSE:NVS) - Titan is due 8% thanks to a long-standing licensing agreement of its own - from which Titan receive $700,000 for the first quarter.

While the royalty revenue is growing, it's still not enough to fund an FDA filing and commercial launch, so Titan closed on a deal with Deerfield earlier this year to ensure that another $20 million in funds is available.

Between the Fanapt revenue stream - of which a portion was given to Deerfield in the terms of the loan - some money from NIH grants and the loan, Titan has enough cash on hand to last into the second quarter of 2012.

So that leaves Probuphine results and/or a potential partnership - if not outright sale - as the near-term market moving milestones for Titan. Big pharma is on the prowl for bargain companies with pipelines, both Gilead (NASDAQ:GILD), Merck (NYSE:MRK) and Pfizer (NYSE:PFE) have all insinuated as much, and Titan's pipeline and ProNeura technology might look like a pretty good deal while the TTNP market cap is this low.

Judging by Wednesday's late-day price and volume action, many are betting that the news may be coming sooner, rather than later.

TTNP - Keep an eye on it.

Disclosure: Long TTNP.