View Jason Napodano, CFA's Articles BY TICKER:
ABIO, ACAD, ADDXF, ALKS, ALXA, AMBS, ANAC, ANTB, ANTB, ARNA, ASPX, AVMXY, BCLI, BIB, BLUSF, CMRX, CPHR, CRBP, CUR, CYNAF, CYTX, DARA, DEPO, DRIO, DRRX, EPRS, GLSO, ICOTF, IMNP, INHX, LPCN, MRK, MTNB, MYOS, NBIX, NRIFF, NRTSF, NTRP, NUOT, NVIV, OMBP, ONVO, OXYS, POZN, PRTK, PRTX, TENX, TNXP, TPIV, TTNP, ULUR, VCEL
DURECT's Endogenous Epigenomic Regulator DUR-928 - What You Need To Know
- On March 2, 2015, DURECT held a conference call and introduced a new pipeline candidate, DUR-928, an endogenous epigenomic regulator protein.
- Management thinks DUR-928 has potential in a number of metabolic indications such as acute organ injury, NAFLD/NASH, and lipid homeostasis.
- DURECT shares are looking attractive based on improved visibility for POSIDUR, a path forward with REMOXY, and the new Phase 1 asset in DUR-928.
Why You Should Own Cipher Pharmaceuticals
- Newly NASDAQ listed Cipher Pharmaceuticals posted solid financial results in 2014. The company generated $27.3 million in cash from operations.
- Cipher is now laser-focused on building a specialty dermatology pharmaceutical company. Over the past two months they company in-licensed five clinical stage candidates.
- The NDS for a sixth potential new product, Beteflam Patch, is now under review in Canada.
- With a growing revenue base, a deep pipeline of derm products, and cash-flow positive commercial operations, Cipher offers investors an attractive specialty pharma play.
- We see $16 per share as fair-value today, with significant upside as the pipeline rolls forward.
Corbus Plans Multiple Clinical Trials With Resunab In Orphan Indications
- Newly public Corbus Pharmaceuticals plans to begin two Phase 2 clinical trials with Resunab, a novel anti-inflammatory candidate, in the next few months.
- Resunab's novel mechanism of action could prove important in treating inflammatory diseases such as cystic fibrosis and scleroderma.
- Besides initiating clinical trials, we believe the company will actively pursue Orphan Drug filings for Resunab, leading to potential partnering interest in the candidate.
- We believe potential non-dilutive funds are available to Corbus through collaboration with the Cystic Fibrosis Foundation.
Why Vericel Shares Will Double In 2015
- Vericel's commercial business should generate close to $50 million in sales in 2015. Based on the current market cap, the shares are trading at only 1.5x forward revenues.
- The company's ixCELL-DCM study recently completed enrollment and will offer data in the first quarter of 2016. We expect the shares will run-up ahead of the data later this year.
- Management has laid out an aggressive yet astute strategy to drive Vericel to profitability in the coming years. We believe valuation is extremely attractive and upside is significant.
Matinas Biopharma Acquires Aquarius Biotechnologies
- Matinas Biopharma Inc. announced the establishment of a lipid-based, anti-infective platform with the acquisition of Aquarius BioTechnologies, Inc.
- Aquarius lead pipeline candidate is a encochleated nano-particle formulation of Amphotericin B, with plans to enter a Phase 2a study this spring.
- CAmB (now MAT2203) is designed to offer oral administration of and lower toxicity to current IV Amphotericin B products, the market leader which is Gilead's Ambisome.
- Our initial assessment is that this is a relatively low-risk deal for Matinas, with funding already in place for MAT2203 from the NIH, with nice upside potential.
Tonix Shares Looking Attractive As Clinical Programs Advance Forward
- A Phase 3 For TNX-102SL in fibromyalgia is expected to begin in May or June 2015.
- Tonix also just recently started a Phase 2 study with TNX-102SL in military-related PTSD.
- A third program with a second candidate, TNX-201, in tension headache will also begin in the next several months.
- Once all three of these programs are underway we believe institutional investor attention in the Tonix story will soar.
- Our NPV modeling calculates fair-value for Tonix shares at $10, offering significant upside for investors with low-risk over the next 12 months.
Next Steps For Protalex With PRTX-100 Expected To Unlock Significant Value
- Final analysis of the Phase 1b study continues. Management is in discussion with the FDA on the design of a Phase 2 study in RA.
- Beyond RA, we expect the company to finalize an agreement with the U.S. FDA to move into a Phase 1 study in ITP by the middle of the year.
- ITP is an Orphan Drug indication and would provide additional upside to the company on both pricing and exclusivity.
- Protalex balance sheet may look low on cash but the company is backed by management and insiders who collectively just made $5 million available to move PRTX-100 forward in development.
Depomed Acquires Nucynta Franchise From J&J
- On January 15, 2015, Depomed announced it had agreed to acquire the U.S. rights to Nucynta from Janssen Pharmaceuticals.
- The deal is an excellent strategic fit for Depomed.
- It is, however, rather expensive, and financing will be required to close the transaction.
- The stock remains attractive for long-term holders, although we suspect near-term upside is capped by the pending financing and execution risk.
- We see $21 as fair value, based on our early estimates (no financial guidance given).
Auspex Firing On All Cylinders
- Auspex has further differentiated Austedo by showing virtually no impact on QT vs. Xenazine.
- The company also licensed rights to a deuterium-containing levodopa product we believe has enormous potential.
- We continue to be very optimistic on the Auspex story.
Brainstorm Takes Major Leap Forward In Battle Vs. ALS
- Brainstorm Phase 2a data showed a slowing of disease progression on two commonly used scales to assess ALS patients.
- We believe these data are demonstrative of proof-of-concept for NurOwn for the treatment of ALS.
- A U.S. Phase 2 study is ongoing with data expected in 2016.
- Full data from the Phase 2a study is expected at a major medical meeting later this year.
15 Biotech Names For 2015
- The biotech sector had a fantastic 2014; the broader index climbing 35%. The index was up 60% in 2013.
- Below we provide quick analysis on 15 biotech names (within our coverage universe) where investors can look for positive returns in 2015.
- We are big fans of Neuralstem, Cynapsus, Nuo Therapeutics, Amarantus, Lipocine, Neurocrine Bio, Auspex, and Protalex, among several others listed below.
- Auspex Hits Home Run With Phase 3 Data In Huntington's Chorea
Buy Auspex Ahead Of Pivotal Phase 3 Data In December 2014
- Auspex is developing SD-809, an improved formulation of tetrabenazine for the treatment of movement and neurological disorders.
- The lead indication for SD-809 is Huntington's disease, an indication for which the US FDA just granted Orphan Drug status.
- Important Phase 3 data on SD-809 is expected in December 2014.
- We believe the data will be positive, and that Auspex stock is worth $36 per share.
Neurotrope Tackles Alzheimer's Disease With Novel Mechanism
- Neurotrope, Inc. is developing therapeutics for neurodegenerative diseases such as Alzheimer’s Disease (AD).
- The company’s lead compound, bryostatin-1, is a natural compound isolated from a tiny, ocean dwelling organism.
- Bryostatin-1 activates protein kinase C (PKC) and represents a novel treatment option for AD that is supported by extensive preclinical data.
- The company is also developing an AD diagnostic test with early results showing sensitivity (correctly diagnosing AD) ≥ 97% and specificity (correctly identifying individuals without AD) ≥ 96%.
- Neurotrope has a basic market capitalization of only $14 million, with $10+ million in cash in the bank and data from a Phase 2a study coming in early 2015.
InVivo, Neuralstem Treat Spinal Cord Injury Patients
- Two small biotechnology companies are pioneering efforts into treating patients with spinal-cord injury.
- Neuralstem’s approach is to use human spinal cord stem cells injected directly around the site of injury in chronic patients.
- InVivo’s approach involves using a biocompatible scaffolding has been designed to stabilize the spinal cord immediately following injury, as well as protect the existing tissue from further injury.
- We believe both companies have tremendous upside pending the results of their respective Phase 1 trials.
- Below we provide a quick background on SCI and touch briefly on each company and their technology.
Strong Enrollment In Phase 3 Trial Means Good News For Titan Pharma
- Titan's confirmatory Phase 3 trial is enrolling well - slightly ahead of schedule. We believe this is a good sign and shows strong potential demand for the drug.
- Data from the Phase 3 trial is expected around the middle of 2015, with a NDA re-filing expected before the end of 2015.
- We see Probuphine as a $250 to $300 million drug, making Titan shares highly attractive at today's depressed price of only $0.56 per share.
FDA Advisory Committee Comments Create Buying Opportunity In Lipocine
- Lipocine’s (LPCN) stock price was down 32% on September 18th after consecutive FDA advisory committee meetings held in regards to testosterone replacement therapy (TRT).
- Regarding TRT, the committee overwhelmingly voted to alter labeling language to narrow the indication for TRT products.
- The committee did not believe there was an overwhelming concern regarding TRT and CV risk; however, most members thought clinical trials examining the connection are warranted.
- We believe that the market has overreacted and is undervaluing Lipocine based on what we see as only minimal changes to the overall size of the TRT market.
- At the current valuation Lipocine is a good acquisition target upon positive Phase 3 clinical trial results, which are due during the current quarter.
Does TapImmune Have What It Takes To Succeed?
- Below we provide a quick overview and analysis of TapImmune, an OTC micro-cap biotech company focused on the treatment of cancer and infectious diseases.
- Leading pipeline candidates include TPIV100 for HER2/neu breast cancer and TPIV200 for both ovarian and breast cancers.
- We believe TapImmune faces signficant systemic and company specific challenges, but the technology is fairly interesting and the upside potential is enormous.
- Due to the early-stage nature of the pipeline, investment in TapImmune seems high risk / high reward.
What Will Depomed Do With Half A Billion In Cash?
- Thanks to a recent $300+ million convertible debt offering, Depomed now holds over $500 million in cash on hand.
- Based on our analysis of previous transaction, we believe Depomed's model is working. We have identified a few potential targets for the company.
- Based on the current market capitalization and the potential to acquire new products that plug into the model, we believe Depomed's stock has tremendous near-term upside potential.
Newly Nasdaq-Listed Immune Pharma Offers Big Upside
- Immune Pharma shares listed on the Nasdaq last week.
- Two Phase 2 trials with Bertilimumab - one in orphan disease Bullous Pemphigoid and another in ulcerative colitis - should start in September 2014.
- Immune is currently engaging partners for a Phase 3 study with AmiKet in PHN, with a goal of securing a deal by the end of the year.
- We see a number of catalysts coming in the next few months. We believe IMNP shares are under-valued. Our target is $9 per share.
Second Quarter Results Confirm Why We Like Aastrom
- Second quarter results confirm a turnaround is underway at Aastrom Biosciences, lead by the recent acquisition of the CTRM business from Sanofi.
- We believe Aastrom will generate roughly $50 million in revenues in 2015 and $5 million in positive cash flow from the CTRM business.
- The Phase 2b ixCELL-DCM study continues on plan.
- We believe Aastrom shares are worth $6.50 based on the revenues and projected cash flow from CTRM and the NPV of the Phase 2 ixmyelocel-T asset in DCM.
DARA Q2 Shows Good Progress, Signs Of Upside
- Revenues for the Q2-2014 were $0.41 million, up 432% from last year and exceeding expectations for the first time.
- DARA's revamped and enhanced commercial sales efforts seem to be working. We believe revenues in 2015 can approach $5.0 million.
- DARA will meet with the U.S. FDA to discuss KRN5500 in the coming months. KRN5500 has been awarded two Orphan Drug designations and Fast Track development status.
- Securing a development partnership for the initiation of a Phase 2b study with KRN5500 is top-priority after the FDA meeting. The company reports being in-talks with potential partners right now.
- As of June 30, 2014, DARA held cash of $15.9 million. We believe this is enough to fund operations into 2016 based on a declining burn rate.
Depomed Shares Offer 50% Upside Over The Next Six Months
- Depomed Q2 financial results exceed Street expectations based on strong product sales and royalties. The company raised guidance on their second quarter call. Business fundamentals looks strong.
- We expect the company to win its ANDA patent litigation against Actavis, keeping a generic Gralise off the market until at least 2022.
- Zipsor product sales are poised to increase meaningfully in 2015 based on loss of formulary coverage for chief competition and increase marketing effort by the company.
- Depomed exited the second quarter with $224 million in cash, representing roughly 1/3rd of the current market capitalization.
- Depomed currently trades at less than 3X 2014 revenues. The specialty pharma average is roughly 4.5X revenues. We see the stock as meaningfully under-valued. Our target is $17.50.
Why I'm Still Optimistic On LymPro And Amarantus Bio
- Last month Amarantus presented data on LymPro, the company's Alzheimer's disease blood test, at two Alzheimer's conferences.
- Amarantus shares ran up significantly in anticipation of this data, then corrected hard when the market was less than impressed with what was released.
- We believe the market may have misinterpreted the initial data on LymPro. Additional data, specifically with a newer version of the test, is coming in September 2014.
- Nothing we have seen over the past month changes our belief that the opportunity for Amarantus with LymPro, specifically under CLIA, remains meaningful.
Cipher's Business Continues To Hum Along
- Second quarter financial results exceeded our expectations on strong royalties from U.S. sales of Absorica and a surge in revenues on Lipofen.
- We believe Cipher will become active in the in-licensing and M&A market over the next several months. Cipher exited the second quarter with nearly $40 million in the bank.
- Cipher is trading at only 10x 2014 EPS, well below the specialty pharmaceutical industry average of 16x. Based on fair-value valuation, we see Cipher worth $12 per share.
Great Buying Opportunity In Pozen Shares
- Pozen shares have sold off significantly over the past month on PDUFA delay and Horizon's loss of some formulary coverage for VIMOVO.
- We believe PA will be approved in December 2014 and there will be a meaningful run in the shares ahead of approval.
- Horizon losing formulary coverage for VIMOVO is unfortunate, but the impact to Pozen is minimized by minimum guaranteed payments and an increase in the Ex-U.S. sales royalty rate.
- We believe Pozen is worth $11.50 per share based on DCF. Assuming PA gets approved in December 2014, Pozen should generate over $1.00 in EPS.
MYOS Corp. Tackles Muscles Health
- MYOS Corporation is a biotherapeutics and bionutrition company focused on improving muscle health and function to combat muscle related diseases.
- We believe a solid scientific basis differentiates MYOS from other bionutrition companies.
- Rapidly increasing revenues are helping to provide the necessary capital for research initiatives targeting muscle health.
- The company just recently listed on the NASDAQ. MYOS has a clean capital structure and strong management.
- We believe MYOS would make a good investment for those looking to get into the emerging area of muscle health. We see the shares fairly valued at $20.
For Avita, 'NICE' Decision In September Could Be Huge
- The UK's MTAC is expected to meet on July 17th to review data on Avita Medical's ReCell for the treatment of burns and scalds.
- A positive recommendation to MTAC to NICE would facilitate reimbursement of ReCell in the UK, opening up a huge market and setting a precedent for the rest of Europe.
- ReCell is a simple to use and effective product for the treatment of a number of skin defects. Sales, however, are limited by lack of reimbursement.
- A decision by NICE is expected in September 2014.
Immune Pharma: A Top-Pick Based On Pipeline And Valuation
- Amiket™ is a Phase 3 ready neuropathic pain product that has been granted Fast Track status by the U.S. FDA for Chemotherapy Induced Peripheral Neuropathy (CIPN).
- The drug has been tested in over 1700 patients in various Phase 1/2 trials for different types of neuropathic pain.
- The drug has also received Orphan Drug Designation for treatment of post-herpetic neuralgia (PHN) in the U.S. We anticipate an EU Orphan filing in the next few months.
- Amiket™ has the potential to reach approximately $850 million in sales as a treatment for various types of neuropathic pain, which we discuss below.
Pozen Resubmits PA NDA, PDUFA In Two Months?
- We believe Pozen represents a compelling valuation and catalyst play at this level.
- Despite the minor CRL issued by the FDA in April, the application is now back under review and we continue to believe PA is approved in 2014.
- Once PA is approved, we think Pozen becomes cash flow positive on an operating basis through a combination of growing royalties on both PA and Vimovo.
- Pozen is also sitting on enough cash that the company may look to do another cash-distribution to shareholders in 2015.
- We see the shares fairly-valued at $12.50.
Update On Dario Launch And Progress
- Dario has been undertaking a "soft launch" of the Dario device and App since March 2014. Initial user feedback has been very positive.
- The company is working on securing new distribution agreements and insurance reimbursement over the past year. Recent wins in Italy and the UK are encouraging.
- LabStyle's market capitalization is a puny $27 million, but we believe the company is well-positioned to become a major player in the $12 billion SMBG market.
- We believe the shares a meaningfully undervalued at today's level and expect significant news flow on the EU launch and U.S. approval will drive the shares higher.
2 Biotechs Race To Treat Movement Disorders
- Tetrabenazine is a 60-year old drug used to treat involuntary movement disorders. The drug is highly effective, but use is limited by poor tolerability.
- Auspex Pharma and Neurocrine Bio are racing to develop improved forms of tetrabenazine, with each company going after a different lead indication.
- Auspex shares look attractively valued base on the potential for SD-809. Similarly, Neurocrine shares offer significant upside to investors based on development of valbenazine (and elagolix).