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On March 6, Barrier Therapeutics (OTC:BTRX) announced agreement to co-promote Vusion ointment to pediatricians in the United States with Novartis (NYSE:NVS), through which Novartis' consumer health division will promote Barrier’s Vusion treatment for diaper dermatitis to pediatricians in the U.S. Under the agreement, which runs through 2008, Barrier will pay Novartis a flat fee for each sales call made to a pediatrician.

According to FTN Midwest Securities Corp. analyst Timothy Chiang:

“Barrier Therapeutics has an extensive pipeline of products for the treatment of acne and psoriasis. They have a number of antifungal products as well. I think the market has had a difficult time valuing this company largely because the company's first two products that were approved this year probably have peak sales potentials around $35 to $40 million, but it looks like the company's pathway to profitability may not occur until 2009 or 2010. So my feeling is the pipeline may create the upside potential for this company.

We think at least three or four Phase II studies will be completed by the first half of 2007. Again, some of the products that they hope to provide Phase II results for include topical Rambazole (for acne treatment), oral Rambazole (for acne and/or psoriasis treatment), and Azoline, an anti fungal.

So I think the market is looking for more clues as to what the potential of their new drug pipeline is, and I think we will get those clues in the first half of next year.”

The Soros Fund Management is currently the largest institutional shareholder in Barrier holding 11.46 percent of all outstanding shares. JP Morgan Partners is the second largest institutional shareholder currently holding 9.16 percent of all shares. Roth Capital upgraded Barrier shares to a "Buy" investment rating on March 1.

BTRX 1-yr chart


Disclosure: Author has no position in any of the above-mentioned securities.