NuPathe: Beaten Down Stock Offers Opportunity Into Zelrix Trial Results

Aug. 9.11 | About: Teva Pharmaceutical (TEVA)

On August 29, NuPathe Inc. (PATH) has a PDUFA date for Zelrix for the treatment of migraine. The stock has lost 40% of its value since the end of July and this may provide a good entry point for a play on the PDUFA date. Aspire Capital thinks as much as it has committed to purchase up to $30 million of NuPathe common stock over the next 24 months. Aspire made an initial investment of $500,000 by purchasing 70,721 shares of NuPathe common stock at a purchase price of $7.07 per share, representing a 19% premium to the closing market price on August 2, 2011.

For some background, Zelrix is an active, single-use, transdermal sumatriptan patch in development for the treatment of migraine. Zelrix is designed to provide migraine patients fast onset and sustained relief through a tolerable, non-oral route of administration. Zelrix may provide an attractive treatment option for many migraine patients because it avoids the need for oral administration and does not depend upon gastrointestinal absorption.

The NDA submission is based on a comprehensive development program, including data from a pivotal Phase III trial (NP101-007) conducted in 530 migraine patients, where the efficacy and tolerability of Zelrix were compared with a matching placebo patch. In that trial, Zelrix met the pre-defined efficacy endpoints of a statistically significant improvement compared with placebo at two hours after patch application for pain free (p=0.0092), pain relief (p < 0.0001), nausea free (p < 0.0001), photophobia free (p=0.0028), phonophobia free (p=0.0002), and migraine free (p=0.0135). Additionally, in the company's 12-month long-term open label trial (NP101-008) in which 183 patients enrolled, Zelrix demonstrated efficacy for these same endpoints consistently throughout the duration of the trial.

Zelrix was well-tolerated in both the pivotal Phase III trial and the 12-month long-term open label trial. The most common adverse events were related to the patch application site and included application site pain, itching, tingling, and skin reaction. The majority of adverse events were mild and transient. The incidence of triptan-specific adverse events reported for Zelrix was very low. NuPathe believes this low incidence, taken together with the efficacy demonstrated in its clinical trial program, validates the benefit of controlled transdermal delivery. Importantly, the safety and tolerability profile of Zelrix remained consistent over the course of the 12 months of the long-term open label trial.

Migraine is a neurological disorder that affects approximately 31 million adults in the U.S. The most prescribed treatments for acute migraine in the U.S. are triptans, accounting for 94% of the 13 million prescriptions filled for acute migraine therapies for the 12 months ending November 2010. Yet, triptan-related adverse events, including chest tightness, chest heaviness, paresthesias, and panic, can lead some patients to avoid or delay treatment with triptans.

NuPathe is a specialty pharmaceutical company focused on the development and commercialization of branded therapeutics for diseases of the central nervous system, including neurological and psychiatric disorders. At the end of March, the company had over $32 million in cash. The company believes that its existing cash and cash equivalents will be sufficient to fund its operations and capital requirements through FDA approval of Zelrix and into the expected commercial launch of Zelrix in the U.S. in the first half of 2012.



Disclosure: I am long PATH.