Antares: Bulls Return After Pig Roast

| About: Antares Pharma (ATRS)

This article is a musing of extraordinary brilliance, so I advise popcorn and soda.

In a message thread on a recent article I wrote, a courteous poster identified as "budapestjs" asked if I would respond to the LibiGel debacle since SA authors suddenly went silent on the issue, and I among them. I acquiesced to the request because I too wanted read my own answer. In summary I reviewed what was already being said: LibiGel worked, but I ventured poor experimental design washed out the results. That of course is my opinion. Antares (AIS) obviously has its own opinion something similar to Amish excommunication as LibiGel disappeared from its website in under 24 hours.

But my answer should have also gone one step further. I should have admitted to my own greed and blind-confidence leading up to the big day that was foreordained a "slam-dunk". Instead, the stock-pantheon punished the mortals at the crucible of reality. I was as wrong as the next guy about the expected positive outcome and it tasted as good as stomach-acid back-wash after eating pizza.

Now why I write this article is because I remain an Antares investor whose knees got skinned. But I'm not going to run and hide or act like it didn't happen. I want to know, "Where did I go wrong?" because my aim is to improve. After all, in a previous investment that I once raved about in a flatulent burst of over-exuberance, I somehow mustered the courage to jump ship when it struck a titanic iceberg. But this time with Antares, I was left standing on the bow as I watched the crest of a Poseidon-size wave sweep over my head. Would it have been better to have put a stop-loss into my account? Me-don't-trust-those-flash-crash-computers!!!

Meanwhile, unlike other biotech tankers that have been lost at sea, Antares has demonstrated why all along we knew it wasn't a one trick pony. The approval of the 84 mg version of Anturol partnered with Watson (WPI) gained a few cheers, but the year ended with a resounding trumpet blast when Antares announced it had signed an undisclosed partnership with Pfizer (NYSE:PFE). Of course, the information regarding the deal reads like an "Ellery Queen Mystery Magazine", but thank goodness the sell-off subsided enough so that the market can go back to those unexplainable pops and drops that defy logical rationale. I mean on the accomplishment of Anturol and signing with Pfizer you would think $2.50/share not too much to expect, but this is the stock market.

So what did I learn? Unchecked exuberance for the slam-dunk, filthy greed in my darkened soul, and blind-confidence led this pig to the slaughter and I have no excuse. But don't cry for me or send get-well cards. Responsibility is responsibility. For weeks the stock price danced well high enough for me to buy Christmas toys and next year's vacation, but I missed the lion's share opportunity to be satisfied. Nevertheless, an apple-eyed pig on the rotisserie can be a tasty morsel and in truth I really don't feel all-so defeated because of where I see Antares heading.

Thankfully though, the error of my ways was compensated by my well-thought-out due-diligence that Antares wasn't a gel company; it is an injector company and until investors wake up to that fact they'll keep talking about who they want to gel next. And LibiGel had it been successful, while it could have bought me a Porsche, I can sit tight for the Bentley. We are at the beginning of a biosimilar monsoon.

It is to state: on paper, Antares has a very interesting year ahead. The fate of VIBEX-Epinephrine is on the legal calendar for Q1 and the company is looking forward to the FDA approval and launch of VIBEX-2, both partnered with TEVA (NASDAQ:TEVA). And I must say how much I've enjoyed the mental exercise that has gone into trying to discover the undisclosed injector projects TEVA has with Antares. The biosimilars market certainly looks attractive, but there I go again -- being a pumper! But you have to realize something--Antares is sitting at the top of TEVA's biosimilar food-chain. How do I know that? Right here, slide #12. Now if Pfizer turns out to also be an injector project, that means Antares is on the biosimilars forefront of two very major pharmas. Whether Copaxone, Neutroval, Sumatriptan, Neugranin, DiaPep277, Interferon alpha, or Natalizumab, Antares is in a very enviable position. Just listen to Wotton. Or look at slide #8 where Tev-Tropin is listed as TEVA's trophy. Or remember Antares has a manufacturing-sales partnership with Uman in Canada for VIBEX MTX.

Yeah, I'm licking my LibiGel wounds and Antares is starting to taste like honey. The VIBEX QS (Quickshot) can deliver a viscous hazardous medicament to a precise depth in under 3 seconds. Safe. Effective. Pain-free. The IP reads like a virtual biosimilar grocery list. The pictures I've seen suggest it's sleek and compact; my favorite color choice: baby blue. Mixed dosage, multiple dosage, hazardous materials, Antares has broad IP protection including curious activity as far as Australia and Japan.

Meanwhile, the little fleas like me who invest in these risky biotechs like Antares are eagerly watching for the partnership announcement for NestraGel. Dang! I thought I was suppose to stop talking about gel products! But not wanting to catch another over-exuberance cold, I'd caution investors to remain calm because at best you're looking at seven years before it may ever be approved by the FDA. Nevertheless, this is a multi-billion dollar market (Oh why can't I just shut up? There I go again, being a pumper!) But it is -- a multi-billion dollar market and the Population Council is closely working with Antares because a contraceptive gel would gain significant market acceptance. Just keep your eye on the conference the end of February where Antares and the Population Council discuss the ins and outs of partnerships.

No, I'll tell you what more than anything else that has me cautiously optimistic about Antares. It's that growing revenue stream thanks to Elestrin, more specifically the HGH partnerships with Ferring, JCR, and TEVA, and the money TEVA is investing in Antares to carry its own programs forward. It's also seeing that VIBEX MTX is going full-speed ahead and we're at the beginning of VIBEX QS. It's reading 'debt-free' and millions in cash on hand in SEC filings. It's dollars people!

Therefore, my conclusion is by 2014 Antares will achieve a double-digit pps and perhaps earlier in 2H 2013 if a few stars align at just the right time. Because by then, VIBEX MTX (if approved) will enter the market and other TEVA projects will have already come on-line in 2012 and 2013. So for 2012, I'm setting a target of $4-6/share by the year-end based on these assumptions:

  1. VIBEX Epinephrine is FDA approved and may legally enter the market by year-end or 1H 2013. The same for VIBEX 2 - approved, launched, and marketed.
  2. Continued sales growth of HGH including market expansion and penetration.
  3. Robust launch of Anturol in 1H 2012.
  4. The addition of 1-2 more pipeline injector projects (e.g. VIBEX QS).
  5. One juicy surprise.

2012 target: $4-6/share.

Disclosure: I am long AIS. Investors buy or sell at their own risk. After 72 hours, I am free to buy or sell any stock mentioned in this article according to SA policy.