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Recently, I wrote a note about Anturol [by Antares (AIS)] discussing its therapeutic profile and the commercialization agreement with Watson (WPI). I also wrote an earlier report in which I recommended purchase of Antares. I thought that Anturol had a very high probability for approval, but the FDA has been so risk adverse in recent years that I had some trepidation that the agency might find some concern that would lead to a complete response letter. It is a relief to see the approval come through as this is a major commercial opportunity for Antares.

The FDA approved the 84 mg dose of Anturol but not the 56 mg dose. In the phase III clinical trials both the 84 mg and the 56 mg doses reached statistical significance on the primary endpoint of reduction in number of urinary episodes with respective p values of 0.028 and 0.033 respectively. The 84 mg dose was statistically significant on the secondary endpoints of average urinary frequency and void volume while the 56 mg dose was not.

I see no commercial or therapeutic implications to the FDA only approving the 84 mg dose. Anturol is a topical gel delivered in a metered-dose pump. The 84 mg dose is given as three squirts while the 56 mg dose would be given as two squirts from the same container. Even if the 56 mg dose had been approved, physicians would have started patients at the high dose and titrated the dosage down with the goal of retaining efficacy and minimizing side effects. I think that they will follow the same practice of titrating down even though the FDA did not approve the 56 mg dose.

Upcoming Stock Catalysts

I continue to recommend Antares as a very strong long term investment. In addition, I think that there are a number of significant catalysts in 2012 that could positively affect the stock.

The next significant catalyst for the company could relate to the Vibex epinephrine auto-injector product. Teva was first to file as a generic to the innovator product, Pfizer’s (NYSE:PFE) Epi-Pen. Pfizer sued Teva and the trial is scheduled to start in February 2012 with a decision possible a few months later. The worst outcome for Antares obviously would be if Pfizer were to prevail in the suit. There are three other possibilities: (1) Teva wins and launches a generic in 2H, 2012, (2) Pfizer allows Teva to launch an authorized generic and (3) Pfizer and Teva reach a settlement in which Teva agrees not to launch for some time (perhaps two to three years). In the event of a settlement, Antares is entitled to a significant percentage of the settlement amount.

Of the positive outcomes, I think that Teva launching a generic is best for Antares. I believe that this would result in profitability for Antares for the year following the launch. The settlement would infuse a significant amount of cash onto the Antares balance sheet, but at this point in time I think investors would prefer operating profits over cash. The authorized generic falls in between.

I think that Teva has also filed an ANDA on the Vibex sumatriptan auto-injector product and, if so, that this could be approved in 2012. There could also be positive news on the company’s home run product injectable methotrexate and the NDA could possibly be filed in 2012.

Source: Approval Of Anturol Is A Major Positive For Antares