Parsing Talk Surrounding Pfizer's Mystery Drug At Antares

Includes: ATRS, PFE
by: James Stocklasar Thomas Jr.

Up front, this is a speculative article and readers will need to draw their own conclusion. However, for many months, investors have been combing the internet for clues into what Pfizer's (NYSE:PFE) mystery drug is going under development at Antares (NASDAQ:ATRS). Looking at a number of variables, and searching for links, I may have stumbled on that answer. If I am correct, then "all bets are off" on how high Antares's stock price will go.

Now speculation is speculation and the final word must be company confirmation. Nevertheless, the internet is often a window into what companies are doing. In this case, I think I may have found a number of very curious links that point to Lipitor. I will represent these here and it is up to SA readers to decide what they think. (In the "comments" section SA readers may want to represent their own speculation.)

The Evidence

1. The recent announcement of Dr. Jaffe from Pfizer to Antares as the new Vice President of Clinical Development is either coincidental or it is a clear signal that whatever this mystery drug is, Pfizer wants its own man guiding its clinical development. (The same could be said for Jack Howarth who also comes from Pfizer to Antares and his expertise is tidying up firms for being bought-out.) Or did these two key players simply decide they saw a better opportunity at Antares? I suppose that viewpoint is possible - remember, this is a speculative article - however, why wouldn't Pfizer want a presence at Antares? After all, that is basically how they approached Icagen before buying them out.

2. Pfizer is on record of wanting to pursue an over-the-counter (OTC) version of Lipitor. For example, as recent as last August 2011 a report came out stating:

"Pfizer Inc. wants to introduce a version of its popular cholesterol pill Lipitor that consumers could buy without a doctor's prescription, according to people familiar with the matter.

The effort, if successful, could help Pfizer squeeze new sales life out of the world's best-selling drug in the years after Lipitor loses U.S. patent protection in November, which will trigger sales-eroding generic competition that will eat into Lipitor's current yearly haul of nearly $11 billion."

In the original announcement, it has been assumed that it would be an OTC since the collaboration is with Pfizer's Consumer Healthcare Business Unit - tyhat unit oversees OTC drugs. An OTC version of Lipitor would fit this qualification. Loss dose statins are already available in Europe, thus the focus on the U.S. market.

3. The collaboration deal between Pfizer and Antares is heavily front-end loaded. The press release stated:

"Antares will receive undisclosed upfront payments, development milestones and sales based milestones, as well as royalties on net sales for three years post launch in the US."

It's curious to ponder, why would Antares agree to a short "three years post launch" unless it was a very lucrative deal? Or, is it in fact Pfizer's intention to take over Antares before that time expires?

Nevertheless, whatever the mystery drug is, it must be a major drug that Antares thinks will be worth so much money up-front. An OTC version of Lipitor would certainly fit that qualification.

4. It is observed that Pfizer has been working on "new" versions of its Lipitor product. For example, one phase 4 trial examines bioequivalence of a "new" 10 mg tablet. As expected, Pfizer has many, many clinical trials citing Lipitor (Atorvastatin) including another phase 4 trial also studying the bioequivalence of a "new" 80 mg tablet. Pfizer's activity shouldn't surprise anyone since Lipitor has been worth billions to the firm. Why wouldn't Pfizer look for a technology to improve the delivery of Lipitor, and possibly, at levels the FDA might approve for OTC?

5. In an in-depth search, there appears to be patent evidence that may link Atorvastatin to not only Pfizer, but also Antares. For Pfizer, these patents drew my attention: US20120059040, US20120052074, and US20110301358 because of the technology referenced. For Antares, I was surprised to see that Atorvastatin is also mentioned in patents citing their gel-based technology and their oral Easy TecTM fast-melt technology that was publicized many years ago: US20110245215, US20110195114, 7335379, WO/2007/093305A3, WO/2007/093305A2, and WO/2005/039531A1.

It could be that Pfizer favors a gel product to address the liver side effects of an oral tablet, or, it may be Pfizer favors a fast-melt tablet for an aging population who have trouble swallowing, or for children who are diagnosed with high cholesterol. I certainly rule out an injectable product since it is to be OTC.


By all accounts, whether it is Lipitor or Advil (some think on chat boards - I haven't seen any verifiable evidence) or a lidocaine-based pain gel (others muse on chat boards - again I haven't seen any verifiable evidence), whatever the mystery drug is, it must be worth a bundle to Antares and to Pfizer that two of its top-level employees are now sharing the helm at Antares.

I have clearly stated up front that this article is speculative. However, there is another value to this article short of an announcement from either company. How so? It is to state that while biotech investing can be very risky and disappointment about what the OTC drug may turn out to be, in contrast I am more inclined to favor a view that whatever the OTC mystery drug is, it is going to be a very strong catalyst for Antares's share price. Yes, while the downside could be the revelation of more mediocre OTC drug, I like many other investors will continue to study for clues since the potential effect on the share price could favor a considerable upside. It just may be, this tightly protected secret could be leaked as investors scrambled to discover this mystery OTC drug.

Here in Friday's trading Antares briefly touched $4.14/share breaking the $4/share barrier. I maintain my target of $6/share before year-end, and if it is Lipitor, the stock could test $10/share.

Disclosure: I am long ATRS.

Additional disclosure: Investors buy and/or sell at their own risk. I do not "short" stocks. For me "long" is until I sell. I declare that I may day-trade any stock at any time appearing in this article.

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