Bio-Pharma Catalyst Movers For July 24

 |  Includes: AMRN, ARIA, ARNA, BMY, VVUS
by: StockMatusow

Amarin (AMRN) PPS: $15.15, down $0.01 (0.07%).

The company is poised to trade higher as a U.S. Food and Drug Administration (FDA) decision for its prescription fish-oil AMR101 is expected by this Friday, which I believe will result in an approval. Furthermore, I believe AMR101 will be granted New Chemical Entity (NCE) certification this week as well. Receiving an NCE certification is critical for longer patent protection--5 years. AMR101 has the potential to become the drug of choice for all patients with elevated cholesterol markers as well as those with high hsCRP values. It also may replace the use of Statins in some situations--a multi-billion dollar market.

Adam Feurestien commented in an article for in January:

If FDA wasn't prepared to provide Amarin with the eight or so years of market exclusivity that comes with NCE status, would the agency really demand the conduct of an 8,000-patient cardiovascular outcomes study that will cost $120 million?

But in an article released on July 11th, Adam suggests potential bad news from a June 22 High level "Orange Book" meeting between Amarin and FDA:

The bad news, potentially, is that Amarin asked to meet with top FDA officials on June 22 because the agency had told the company that NCE status for AMR101 was in doubt. In other words, this meeting was perhaps an attempt by Amarin to convince FDA to change its mind about the market exclusivity of AMR101.

While Adam's view here is reasonable, my take is that the FDA was looking for a reason to grant NCE certification at this meeting--not to reject it. With the Obama Administration's directive to get more drugs approved and out to market along with continued regulatory easing, notwithstanding Adam's original speculation concerning the 8,000-patient cardiovascular study--NCE certification is likely for AMR101. In my opinion, the combined odds of approval of both AMR101 and NCE certification are about 85%.

Pluristem (PSTI) PPS: $3.40 up $0.02 (0.59%).

Pluristem announced before the market yesterday that it will apply to the FDA for approval of its placenta-based stem cell treatment for aplastic bone marrow as an orphan drug or rare disease treatment.

On May 9th, 2012, the company announced that a seven year-old girl suffering from an aplastic bone marrow whose condition was rapidly deteriorating is now experiencing a reversal of her condition with a significant increase in red cells, white cells, and platelets following the intramuscular injection of the company`s PLX cells. Aplastic bone marrow is a disease where the patient has no blood-forming hematopoietic stem cells in the bone marrow. I found more on this story at, and also listened to an in-depth interview with William R. Prather RPh, MD, Senior VP of corporate development at Pluristem that should interest investors.

What investors should strongly consider here is the likeliness of the FDA not only granting Orphan designation approval, but also allowing a phase II pivotal compassionate use trial. This would allow the company to proceed directly from a pivotal phase II clinical to market--if proven to be successful, which in one case as mentioned, already has. In my opinion, Pluristem has the best chance to be the first FDA approved placenta stem-cell based treatment in America. Currently, there are a few clinics outside the United States offering similar treatments, but without regulatory guidelines.

Ariad Pharma (NASDAQ:ARIA) is currently conducting a compassionate use phase II pivotal trial for its drug candidate Ponatinib. Ponatinib is a treatment for patients with chronic myeloid leukemia (CML) or Philadelphia positive acute lymphoblastic leukemia (Ph+ALL), whose cancers are resistant to such drugs as Bristol-Myers Squibb`s (NYSE:BMY) Sprycel or Novartis`s (NVS) Tasigna.

I remarked in an article I wrote for, that placenta based stem cell therapy is the investment of the future, and Pluristem has the right stock and financial structure in place that makes them the best bet in this segment--also because of its patented technology that differentiates it from other companies.

I believe Pluristem has the correct financial structure in place to give it a chance at becoming a huge winner--now and in the future. With a grossly undervalued market cap of 152M, analysts and fund managers might want to take a very close look at Pluristem and do deep due diligence on it.

Obagi Medical Devices (OMPI) PPS: $15.32, down 0.77 (4.79%)

I have written quite a bit about Obagi lately, as I am certain the company will see a buy-out offer very soon. Lately, I have been trying to time such a buy-out, trading in and out for my family trust account. Yesterday, I re-bought 5200 shares at $15.24 for the account--this time in part on an earnings catalyst trade. Obagi has been seeing constant revenue growth quarter over quarter (this seems out of place unless you want to say "because of the strong demand for their products among women"). Obagi recently resolved regulatory issues related to Hydroquinone in Texas and resumed selling products to the state in late May.

Revenue (TTM):


Revenue Per Share:


Qtrly Revenue Growth (yoy):


Gross Profit:




Net Income Avl to Common:


Diluted EPS:


Click to enlarge

Taking a look at Obagi's last quarter above, we can see the company raked in a ton of revenue--done without the 9% of Obagi's sales to Texas. I would speculate because products have resumed shipping to Texas, finished goods inventory will be down, with revenues and earnings up. Any company interested in making an official bid for the company better do so soon, or face paying a higher premium if Obagi crushes on earnings--which I believe it will. My best opinion for a buyout offer is between $25 and $27 a share, and earnings catalyst run-up to $18.

Arena Pharma (ARNA) PPS: $9.94, up $0.42 (4.47%)

Those of you who follow my YouTube Videos know that I am bullish on Arena's long term chances, and predicted a massive sell-off of Vivus (NASDAQ:VVUS) on its approval of Qysmia. Qysmia, a combination of the appetite suppressant phentermine and the antiseizure drug topiramate, will carry a warning about potential heart and birth-defect risks. The drug will also be very limited in its market share, with most sales coming via mail-order for Doctor Prescriptions.

Arena, in conjunction with its marketing partner Eisai Pharma, is scheduled to start selling its FDA approved anti-obesity treatment Belviq in early 2013.

While this drug alone will not make Arena a long term mega-winner, the revenue from its sales can be used to invest in the company's deep pre-clinical pipeline--where the real long term value of Arena might be:

APD811: An orally available agonist of the prostacyclin receptor is intended for the treatment of pulmonary arterial hypertension, or PAH. In December 2010, Arena initiated a Phase 1 clinical trial to evaluate the safety, tolerability and pharmacokinetics of single-ascending doses of APD811. The company believes the results of this early stage clinical trial suggest APD811 has the potential for once-daily, oral dosing.

APD334: A potential oral treatment for a number of conditions related to autoimmune diseases, including multiple sclerosis and rheumatoid arthritis.

APD371: For the potential treatment of pain. The analgesic effects of CB receptor agonists are well established in the scientific literature.

GPR119: A novel pharmaceutical target for discovering orally available small molecule agonists for the treatment of type 2 diabetes.

Temanogrel: An inverse agonist of the serotonin 2A receptor intended for the treatment of arterial thrombosis and other related conditions has completed Phase 1a and Phase 1b clinical trials.

In my opinion, if Arena can get the first weight loss drug approved since 1999, the company can get others approved in time as well. It takes money to make money in business, and I believe Arena has just begun its trek into becoming a potential long term mega pharma.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: Family members are long OMPI and PSTI.

Disclaimer: This article is intended for informational and entertainment use only and should not be construed as professional investment advice, but rather my opinions as a writer only. Trading stocks are risky--always be sure to know and understand your risk tolerance as in any given trade/investment you can incur substantial financial loss. By reading this article, you agree and understand that I am not giving recommendations on stocks to trade. Any trade you make - wins, losses, or break even - are entirely your decision and responsibility. You also agree and understand that I have no material insider information--just opinions. Always do you own complete due diligence before buying and selling any stock, and/or consult with a licensed qualified broker dealer and/or certified financial adviser.