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Repros Therapeutics Inc. (NASDAQ:RPRX) caught the attention of biotech investors after its ~120% rally in May, which sent the stock from a market cap of approximately $63 million to its current $140 million. Biotech investors looking at this firm's history can quickly note that the IPO for RPRX was initiated all the way back in 1993. The company didn't always operate under the name of Repros, however. In 2006, the company's original name of Zonagen was replaced with the current "Repros", presumably in an attempt to repair the company's reputation after failed drugs and lawsuits.

The company currently has a pipeline of two drug candidates which include Androxal and Proellex. Proellex is a progesterone inhibitor that is being developed for the treatment of endometriosis (the disease where womb-lining cells develop in other parts of the body) and uterine fibroids (benign tumors that grow in the womb).

The real problem with this drug is that its clinical development has been shut down before by the FDA due to liver toxicity. The FDA has allowed a continuation of a single trial (announced on June 10, 2010), which will help determine a proper level of dosage for the drug in addition to building evidence that the drug can reduce instances of vaginal bleeding. Repros blames high dosages for the liver toxicity in previous clinical trials, so this study will be of utmost importance for the survival of this drug.

Androxal is a bigger focus for RPRX investors, and was the cause of a massive 87% rally that we saw after May 9th, bringing RPRX to a new multi-year high. The reaction was induced by an FDA announcement, which stated that there has been an agreement between the DRUP (Division of Reproductive and Urologic Products) and the company to put the drug under Special Protocol Assessment (SPA). This means that the drug's unfinished phase III trials can be used for an FDA approval.

Despite the good news, lots of people (rightfully) remain skeptical over Androxal's prospects on the already-crowded market, which includes popular drugs like Abbot's (ABT) Androgel and Eli Lilly's (LLY) Testim. Androxal's active ingredient is enclomiphene, which is one of the two isomers of generic clomiphene. The generic clomiphene contains something known as "E" and "Z" isomers of the same molecule, which are called enclomiphene and zuclomiphene.

Although there are a few differences between the bioactivity of these isomers (like a slightly longer half-life for zuclomiphene according to studies), the fact that there is an off-label generic compound that will do exactly what Androxal will do diminishes the value of the drug significantly. We know the drug works, because it's already widely used. The problem is that this thing will not be able to survive in a heavily saturated market with no unique or useful traits of its own. Investors should seriously consider the risks of RPRX before putting any money into it.

Source: A Closer Look At Repros Therapeutics