Seeking Alpha

EP Vantage's  Instablog

EP Vantage
Send Message
EP Vantage is a forward-looking comment and analysis service tailored to the needs of pharma and finance professionals, focusing on the events that will define the future of companies, products and therapy areas. Written by experienced journalists, EP Vantage provides timely financial analysis... More
My company:
EP Vantage
My blog:
epvantage.com
  • Healthcare companies still desperate for a partner  4 comments
    Jun 30, 2009 12:34 PM | about stocks: CGRB, JNJ, ARNA, MNKD, DSCO, DNDN, VNDA, ADLS, ANSV, SVNTQ

    Six months on from EP Vantage’s review of companies in critical need of securing a partner for their late stage asset (Companies desperate for a partner, November 28, 2008), not only to commercialise the product but critically to provide much-needed cash, the same analysis reveals that the list has grown from 22 to 24 companies, with only Cougar Biotechnology truly successful in finding a partner following its recent takeover by  Johnson & Johnson.

    Almost two-thirds of the original list of 22 companies appear again (see table below), suggesting that the majority of partnering discussions have been slow to progress. Whilst the likes of Mannkind, NeurogesX and  NicOx remain convinced that a major partnership is just around the corner, the going concern statements affecting others like  Anesiva and  Repros Therapeutics reflect the dangerous predicament a number of these companies are currently facing.

    The following analysis presents essentially one-product companies, whose single-product NPV equals the total NPV, who have yet to sign a partner for their late stage asset in a major market.

    Companies with a single product NPV = 100% of total NPV (ranked on years of cash) 
     
    Company 
    Product 
    Product Type 
    Phase 
    NPV ($m) 
    NPV as % of Market Cap 
    Latest Cash ($m) 
    Years of Cash 
    1  
    Advanced Life Sciences 
    Cethromycin (ABT-773)  
    Anti-bacterial  
    Filed  
    584 *  
    n/m  
    0.5  
    (0.9)  
    2  
    Anesiva 
    Adlea 
    Non-narcotic analgesic 
    Phase III  
    199  
    n/m  
    0.3  
    (0.8)  
    3  
    Repros Therapeutics 
    Proellex 
    Female sex hormone  
    Phase III  
    558  
    495%  
    12  
    (0.3)  
    4  
    MannKind 
    Afresa 
    Anti-diabetic  
    Filed  
    2,285  
    273%  
    30  
    (0.3)  
    5  
    Discovery Laboratories 
    Surfaxin 
    Other respiratory agent  
    Phase III  
    351  
    308%  
    19  
    (0.3)  
    6  
    Pharming 
    Rhucin 
    Other haematological  
    Phase III  
    332  
    393%  
    21  
    (0.1)  
    7  
    Arena Pharmaceuticals 
    Lorcaserin 
    Anti-obesity agent  
    Phase III  
    930  
    220%  
    70  
    (0.1)  
    8  
    NeurogesX 
    Qutenza 
    Non-narcotic analgesic 
    Filed  
    476  
    405%  
    19  
    0.0  
    9  
    Alexza Pharmaceuticals 
    AZ-004 
    Anti-psychotic  
    Phase III  
    455  
    548%  
    47  
    0.2  
    10  
    TiGenix 
    ChondroCelect 
    Other musculoskeletal agent  
    Filed  
    227  
    158%  
    29  
    0.3  
    11  
    Savient Pharmaceuticals 
    Krystexxa 
    Anti-gout preparation  
    Filed  
    664  
    88%  
    58  
    0.4  
    12  
    Somaxon Pharmaceuticals 
    Silenor 
    Sedatives & hypnotic  
    Filed  
    90  
    429%  
    4  
    0.4  
    13  
    BioMimetic Therapeutics 
    Augment OS1 
    Bone calcium regulator  
    Approved  
    991  
    506%  
    52  
    0.4  
    14  
    Poniard Pharmaceuticals 
    Picoplatin 
    Platinum compound  
    Phase III  
    289  
    172%  
    60  
    0.5  
    15  
    Protalix BioTherapeutics 
    prGCD 
    Other therapeutic product  
    Phase III  
    341  
    108%  
    35  
    0.5  
    16  
    OXiGENE 
    Zybrestat 
    Other cytostatic  
    Phase III  
    309  
    327%  
    27  
    0.6  
    17  
    Biodel 
    VIAject 
    Anti-diabetic  
    Phase III  
    841  
    669%  
    90  
    0.7  
    18  
    Acusphere 
    Imagify 
    Diagnostic imaging  
    Phase III  
    430  
    n/m  
    16  
    0.7  
    19  
    NicOx 
    HCT 3012 
    NSAID 
    Phase III  
    850  
    155%  
    110  
    0.9  
    20  
    Allos Therapeutics 
    PDX 
    Anti-metabolite  
    Filed  
    706  
    104%  
    131  
    1.0  
    21  
    Dyax 
    DX-88 
    Other haematological  
    Filed  
    595  
    462%  
    52  
    1.2  
    22  
    Cadence Pharmaceuticals 
    Acetavance (IV APAP) 
    Non-narcotic analgesic 
    Filed  
    807  
    180%  
    119  
    1.9  
    23  
    Clinical Data 
    Vilazodone 
    Anti-depressant  
    Phase III  
    2,360  
    810%  
    56  
    2.1  
    24  
    Dynavax Technologies 
    Heplisav 
    Vaccine  
    Phase III  
    95  
    160%  
    60  
    4.9  
     
    * NPV prior to negative FDA AdCom ruling on 3 June 
    Aside from Cougar’s takeover by J&J, the other companies no longer in the list for positive reasons are: Dendreon, reported positive phase III data for Provenge causing massive share price gains which enabled a decent equity issue (The Dendreon rollercoaster continues , April 29, 2009); MolMed, reported positive phase I data for Arenegyr which attracted new analyst valuations so de-risking their pipeline;  Vanda Pharmaceuticals, who gained the surprise FDA approval of the decade for Fanapt (Vanda shares rocket after surprise Fanapt approval , May 7, 2009), the company is still in need of a partner but the product has yet to attract renewed analyst valuations.

    Meanwhile, La Jolla Pharmaceutical also drops off the list, having almost produced a fairy-tale ending for its arduous development of lupus drug  Riquent by signing a deal with  BioMarin Pharmaceutical, only for the drug to fail in phase III trials (La Jolla drug failure leaves few options, February 12, 2009).

    Current predicaments

    Probably the most high profile name on the list is MannKind, the only company brave enough to be pushing on with an inhaled insulin product. At the recent American Diabetes Association meeting earlier this month, the company’s chief executive Alfred Mann was once again talking up prospects for a deal. Despite the company’s bullish stance real concerns over the approvability and commercial potential of the product exist. As such, the chance of securing a deal before the outcome of the January 15, 2010 PDUFA date is known, looks slim.

    Advanced Life Sciences' chances of finding a partner for its antibiotic cethromycin were effectively dashed by a ruling by an FDA advisory committee earlier this month. The panel ruled in favour of the drug’s safety, but voted strongly against efficacy. A decision from the regulator due by July 31 is unlikely to be positive.  

    Although ALS has $2m cash at hand and has the option to draw down a further $12m over the next 15 months from a committed financing agreement, the outlook for the company appears fairly bleak. As such, if any partners are tempted, the asset is likely to be available a lot cheaper in the months ahead (Advanced Life Sciences reeling from FDA rejection  June 3, 2009).

    Anesiva meanwhile is in an even worse financial situation, its auditors having issued a going concern qualification in April, and its stock breaching Nasdaq listing rules. The group has pared back costs and plans to be operating largely as a virtual company by year end, in an attempt to keep hopes of finding a partner for  Adlea, its long-acting, non-opioid analgesic drug candidate which is in development for the management of acute pain following orthopaedic surgery.

    Savient Pharmaceuticals meanwhile has long been in search of a partner for its gout treatment  Krystexxa, but has learnt the hard way about toying with investors’ expectations. A long promised deal failed to materialise in 2008, and the stock was hit hard (Savient's broken promises cause share woe, September 30, 2008). As a result, management are now refusing to comment on the situation, other than to say options are being explored, but following strong endorsement for the product at an FDA advisory committee earlier this week, ahead of an August 1 PDUFA, there is a good chance that Savient will not be on the same list in six months time. 

    Disclusre: No Positions

Back To EP Vantage's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (4)
Track new comments
  • Jolly_Rancher
    , contributor
    Comments (550) | Send Message
     
    I think you made a mistake in your cut and paste. Poniard's Picoplatin and Arena's Lorcaserin are in phase 3.
    30 Jun 2009, 01:33 PM Reply Like
  • USisCorrupt
    , contributor
    Comments (993) | Send Message
     
    You think Dendreon is desperate? I think you are Clueless! Dendreon WHEN they announce their Partner it will be a Shell SHOCK as to the amount of Money involved. I myself see a record amount which will stun everyone but you I bet you are a Short puppet being used to feed the masses what you want them to hear. How many shares are you naked?
    30 Jun 2009, 01:50 PM Reply Like
  • USisCorrupt
    , contributor
    Comments (993) | Send Message
     
    You think Dendreon is desperate? I think you are Clueless! Dendreon WHEN they announce their Partner it will be a Shell SHOCK as to the amount of Money involved. I myself see a record amount which will stun everyone but you I bet you are a Short puppet being used to feed the masses what you want them to hear. How many shares are you naked?
    30 Jun 2009, 01:50 PM Reply Like
  • Janine McCargo
    , contributor
    Comment (1) | Send Message
     
    NeurogesX: Astellas Deal a Major Positive
    by: Zacks.com June 22, 2009 | about: ALPMF.PK / NGSX
    By Jason Napodano
    seekingalpha.com/artic...

     

    On June 22, 2009, NeurogesX (NGSX) (Analyst Report) announced that it has entered into a development and commercialization partnership for Qutenza, the company’s cutaneous patch for neuropathic pain, with Astellas Pharmaceuticals (ALPMF.PK). NeurogesX has licensed for commercialization Qutenza in all 27 EU member states, plus Iceland, Norway, Liechtenstein and Switzerland, along with the Middle East and Africa.

     

    Astellas has also agreed to fund the required additional studies as requested by the European Commission, which include a long-term safety program in on-label indications. In return, Astellas has agreed to pay NeurogesX an upfront payment for Qutenza of €30 million ($42 million).

     

    We expect that NeurogesX will recognize this payment over the life of the agreement. Astellas has also purchased an option to co-develop NGX-1998, the company’s liquid formulation, for €5 million ($7 million). In addition to these upfront payments, Astellas has also committed €70 million ($97 million) in development and sales related milestones for Qutenza and NGX-1998.

     

    NeurogesX will be entitled to a mid-teen to mid-20s percent scaling royalty on sales of the product. NeurogesX will continue to supply Qutenza to Astellas at a fixed transfer price. Astellas plan to be ready to launch the product during the first half of 2010.

     

    We view the deal as a major positive for NeurogesX. The $49 million in cash provides a significant runway for management to push forward with commercialization plans in the U.S.

     

    On the recent conference call, management noted that the 20-person bridging study requested by the U.S. FDA testing a 2.5% lidocaine + 2.5% prilocaine pre-application cream has completed and the company plans to analyze the data shortly. This data will be submitted to the FDA in July or August 2009. We expect that the FDA will push back the U.S. PDUFA action date from August 16, 2009 to October / November 2009. If approved, NeurogesX should be in position to launch the product during the first half of 2010.

     

    The $49 million upfront payment from Astellas will help management fund the creation of a specialty sales force to promote the product. We view the current cash balance, which should stand between approximately $60 and $65 million at the end of the second quarter 2009, is sufficient to fund operations to cash flow positive by 2011.
    30 Jun 2009, 03:25 PM Reply Like
Full index of posts »
Latest Followers

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.