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Jason Napodano, CFA

 
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  • Buy Auspex Ahead Of Pivotal Phase 3 Data In December 2014
     • Thu, Nov. 13 ASPX 4 Comments

    Summary

    • 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
       • Tue, Oct. 21 NTRP 12 Comments

    Summary

    • 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
       • Thu, Oct. 16 CUR 58 Comments

    Summary

    • 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
       • Wed, Sep. 24 TTNP 10 Comments

    Summary

    • 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
       • Tue, Sep. 23 LPCN 4 Comments

    Summary

    • 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?
    Thu, Sep. 18 TPIV 2 Comments

    Summary

    • 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?
       • Thu, Sep. 11 DEPO 11 Comments

    Summary

    • 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
       • Tue, Aug. 26 IMNP 9 Comments

    Summary

    • 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
       • Tue, Aug. 19 ASTM 7 Comments

    Summary

    • 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
       • Thu, Aug. 14 DARA 10 Comments

    Summary

    • 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
       • Fri, Aug. 8 DEPO 11 Comments

    Summary

    • 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
    Editors' Pick • Wed, Aug. 6 AMBS 40 Comments

    Summary

    • 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
       • Thu, Jul. 31 CPHMF Comment!

    Summary

    • 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
       • Wed, Jul. 30 POZN 16 Comments

    Summary

    • 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
       • Tue, Jul. 22 MYOS 18 Comments

    Summary

    • 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
       • Tue, Jul. 15 AVMXY 30 Comments

    Summary

    • 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
       • Wed, Jul. 9 IMNP 10 Comments

    Summary

    • 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?
       • Thu, Jul. 3 POZN 9 Comments

    Summary

    • 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
       • Tue, Jul. 1 DRIO 63 Comments

    Summary

    • 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
       • Fri, Jun. 27 ASPX, NBIX 19 Comments

    Summary

    • 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).
  • Protalex PRTX-100 - A Potential Blockbuster For RA
       • Wed, Jun. 18 PRTX 7 Comments

    Summary

    • PRTX-100 shown to be safe and well tolerated in five weekly doses up to 12.0 micrograms/kg (μg/kg).
    • A majority of PRTX-100 treated patients developed anti-drug antibodies, but these did not correlate with clearance of the drug or preclude a CDAI response.
    • Treatment with PRTX-100 lead to a higher response rate for ACR, DAS28-CRP, and CDAI measures at days 29, 57, 85, and 113 vs. placebo.
  • DARA Snags Second Orphan Indication For KRN5500
       • Tue, Jun. 17 DARA 3 Comments

    Summary

    • The FDA granted KRN5500 a second Orphan Drug Designation, this time for the treatment of multiple myeloma.
    • In our article below we summarize some publications highlighting data from KRN5500 in both neuropathy and multiple myeloma.
    • We believe DARA's commercial business is worth $15 to $20 million. KRN5500 adds another $10 to $15 million in value within our model.
    • Investors are getting DARA's commercial business at fair-value at today's price. We believe they are getting KRN5500 for free. If a deal can be struck, we see sizable upside.
  • Time To Buy Aastrom Biosciences
       • Tue, Jun. 17 ASTM 9 Comments

    Summary

    • We believe ixmyelocel-T for ischemic DCM is worth $30 million in value, valued based on a probability-adjusted NPV analysis.
    • Management has laid out an aggressive yet comprehensive plan to turn around the newly acquired CTRM business.
    • If our projections hold and the company can generate $5+ million in positive cash flow in 2015, then CTRM could be worth another $25 to $50 million in value.
    • The current market capitalization is only $27 million, making the stock attractive for share accumulation in our view.
  • BrainStorm Tackles Neurodegenerative Diseases With Novel Cell Therapy
       • Thu, Jun. 12 BCLI 24 Comments

    Summary

    • BrainStorm Cell Therapeutics, Inc. (BCLI) is a biotechnology company developing adult stem cell therapies for a range of neurodegenerative diseases.
    • The company has a proprietary process called NurOwn™ that harvests and propagates autologous Mesenchymal Stem Cells (MSC) and then induces their differentiation into neurotrophic factor (NTF) secreting cells.
    • Brainstorm recently initiated a multi-center, randomized, double blind, placebo controlled trial Phase 2 clinical trial in the U.S. for ALS.
    • While limited, we are intrigued by the clinical data seen thus far. We believe the shares are worth at least $0.50, which is a handsome 67% return from today.
  • ICo's IDEAL Trial Fails, What's Left For Investors?
       • Tue, Jun. 10 ICOTF 21 Comments

    Summary

    • Top-line results of the much anticipated Phase 2 iDEAL trial with iCo-007 failed to show separation from the active controls.
    • Full data is expected in the fourth quarter 2014. The company is hoping to show positive subset analysis in VEGF-refractory patients.
    • Residual valuation for iCo-008 and iCo-009 lead us to conclude the stock is worth $0.15 per share.
    • At this stage, risk and volatility remain high.
  • Investment In Nuvo Research Looks Like An Easy Call
       • Fri, Jun. 6 NRIFF 3 Comments

    Summary

    • Mallinckrodt Nuvo’s licensee for both Pennsaid® 1.5% and Pennsaid 2%, is in the process of converting Pennsaid 1.5% patients and prescribers to Pennsaid® 2%.
    • Most recent IMS data shows Pennsaid® 2% prescriptions exceeded Pennsaid 1.5%. For 2014, we believe Pennsaid 2% sales could approach $29 million.
    • We continue to believe Nuvo has a very strong case in their litigation with Mallinckrodt, and that a likely outcome will result in significant cash inflow to Nuvo.
    • We believe Nuvo Research is significantly undervalued at today's price and offers upside of 200% based on our analysis.
  • Cynapsus Offers Potential Big Returns
    Thu, May. 29 CYNAF 99 Comments

    Summary

    • Investor misconceptions about Cynapsus have led to an incredible buying opportunity.
    • We believe the company's APL-130277 is a potential $700 million product.
    • Cynapsus recently raised $25 million in cash, enough to fund operations through the NDA filing.
    • Our DCF valuation pegs the shares at $2.25-2.50 right now, with upside to $4.50 on a take-out in 2016.
  • Neuralstem NSI-189 Abstract Teases At Potential Greatness
       • Wed, May. 28 CUR 78 Comments

    Summary

    • Phase 1b data will be presented over the course of 2 medical conferences in June. Comments in the abstract lead us to believe the data are strong.
    • Study investigators noted the data showed a clinically meaningful reduction in depressive and cognitive symptoms that persisted well beyond dosing.
    • Neuralstem's goal is to initiate a Phase 2 study later in 2014.
    • We believe Neuralstem would like to partner NSI-189 with a large pharma company in 2015. This move could unlock significant value for shareholders.
  • GlassesOff: Ready For Prime Time
       • Sat, May. 24 GLSO 7 Comments

    Summary

    • We believe the "Soft Launch" of the GlassesOff App was successful, and are looking forward to seeing the full marketing of the App commence shortly.
    • We believe the upside to the App is enormous and the revenue potential over the next few quarters is significant.
    • With a growing user base and through a combination of social media and celebrity endorsements, we believe the company can achieve cash flow positive operations in 2015.
  • Expecting Big Revenue Ramp At ULURU In The Coming Quarters
       • Fri, May. 23 ULUR 20 Comments

    Summary

    • ULURU is expected to launch Altrazeal in 10 countries in the Q2. We believe this will generate revenue of approximately $400k, up 4x from the Q1.
    • We are expecting Altrazeal to launch in another 30 countries in the Q3 and Q4, generating revenue of approximately $1.2 million.
    • Operating burn in the Q1 was only $160k. We believe the company is rapidly approaching cash flow positive operations.
    • ULURU has undertaken several initiatives to improve the balance sheet, which now shows over $1.0 million in cash and $3.1 million in positive shareholder equity.
    • Given the improvements in the balance sheet and the expected ramp in revenues over the next few quarters, we believe the shares are headed significantly higher by year end.
  • An In-Depth Look At Kiacta Yields 200% Upside On Bellus Health
       • Wed, May. 21 BLUSF 7 Comments

    Summary

    • Bellus Health, Inc. (BLU.TO) is a company focused on the development of treatments for rare diseases.
    • The lead product candidate is Kiacta™, a drug candidate currently in a confirmatory Phase III trial for the treatment of AA Amyloidosis.
    • Bellus has an additional clinical stage compound in Shigamab™, a monoclonal antibody treatment for hemolytic uremic syndrome caused by Shiga-like toxin producing E. coli.
    • The company exited the first quarter 2014 with approximately CAD$14 million, which should enable Bellus to finance its operations beyond the end of the Kiacta™ Phase III trial.
    • We feel confident that the Phase III trial for Kiacta™ will be successful. We are initiating coverage with a Buy rating and $2.50 price target.
  • Deal To Acquire Sanofi's CTRM Could Double Shares Of Aastrom Biosciences
       • Tue, May. 20 ASTM 26 Comments

    Summary

    • We believe acquiring the Cell Therapy & Regenerative Medicine business from Sanofi was an incredible deal for Aastrom.
    • Aastrom will immediately being generating revenues to the tune of $44 million per year, with strong potential to drive operating profits over the near-term.
    • Based on our back-of-the-envelope calculations, Aastrom could see $5-10 million in operating profits from CTRM in 2015.
    • Terms will be announced in the next 2-3 weeks. We believe this could double the shares.