What FDA's Delay of Probuphine Trial Means for Titan Pharmaceuticals

Jun.20.11 | About: Titan Pharmaceuticals, (TTNP)

Shares of Titan Pharmaceuticals (NASDAQ:TTNP) took a haircut on Friday after the company announced that the analysis and release of results from the confirmatory Phase III trial for Probuphine, for patients with opioid dependence, will be delayed due to ongoing discussions with the FDA regarding the primary and secondary endpoints of the trial.

TTNP hit lows of $1.30 during intra-day trading before rebounding to close the week at $1.69, with volume of over two million.

What was unusual, if anything, about Titan's news announcement on Friday was the fact that it came in two separate press releases, one before the market open, and the other just before 2 p.m., which led to the late-day recovery in price.

I didn't get the impression from the later PR that there was new information that could not have been included in the first release, so you've got to wonder what was behind the split announcement. With the second release being a tad bit more positive-sounding than the first, I can't help but believe that anyone buying into the dramatic early-dip ended up getting a pretty good deal.

The basis of discussions with the FDA that began back in March, according to Friday's PR, relates to a requested revision of the Statistical Analysis Plan (SAP) for the Probuphine trial, which Titan had submitted during the third quarter last year.

The FDA would like some data contained as a primary endpoint, where previously the information was contained as a secondary.

Communication with the FDA is still ongoing, so it is still too early to ascertain precisely when the data will be released now, but a safe guess would be by the end of the summer months.

To Titan's advantage, the data from the trial is still blinded and unanalyzed, leaving little doubt that the company can move forward with minimal delay.

Investors don't like uncertainty, and Friday offered some uncertainty to TTNP as events had otherwise been moving along smoothly and as planned during the year.

At the end of the day, it looks like a slight delay for the release of results, and investors who are banking on a positive outcome for Probuphine might be able to pick up a few shares for well under two bucks.

In the meantime, Titan will still collect royalties on sales of Vanda's (NASDAQ:VNDA) Fanapt, a schizophrenia drug marketed by Novartis (NYSE:NVS).

Disclosure: I am long TTNP.