The Emisphere Story Just Got Bigger

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Includes: EMIS, NVS
by: Envelope Investing

There has been a huge positive development in the Emisphere story that hasn’t really filtered out yet. A friend stumbled upon a patent application filed by Novartis (NYSE:NVS) entitled “Use of Calcitonin for the Treatment of Rheumatoid Arthritis.” The patent application can be viewed here.

The application is for using orally delivered salmon calcitonin for the Treatment of Rheumatoid Arthritis (RA) and even mentions the Emisphere carrier SNAC . This is the first that I or anyone in my network has heard of oral calcitonin being used to treat RA and we are all needless to say very excited about the prospect.
The application makes some pretty big claims such as the following:

2. A method according to claim 1 for inhibiting inflammation of the joints associated with rheumatoid arthritis in a patient in need thereof comprising administering orally to said patient a therapeutically effective amount of a calcitonin in free or salt form and a delivery agent for calcitonin.

3. A method according to claim 1 for inhibiting swelling of skeletal joints associated with rheumatoid arthritis in a patient in need thereof comprising administering orally to said patient a therapeutically effective amount of a calcitonin in free or salt form and a delivery agent for calcitonin.

4. A method according to claim 1 for inhibiting, halting or reversing the cartilage and bone erosion and destruction associated with rheumatoid arthritis in a patient in need thereof comprising administering orally to said patient a therapeutically effective amount of a calcitonin in free or salt form and a delivery agent for calcitonin.

5. A method according to claim 1 for decreasing pain, associated with rheumatoid arthritis in a patient in need thereof comprising administering orally to said patient a therapeutically effective amount of a calcitonin in free or salt form and a delivery agent for calcitonin.

It appears likely that Novartis did some additional clinical trials, possibly a Phase II, to substantiate these claims. The global rheumatoid arthritis drug market was over $11 billion in 2007 and of course one study predicts that it will grow to $27 billion by 2015 with the world’s aging demographics. We see the potential for huge off label prescriptions of salmon calcitonin once it is approved for the treatment of Osteoarthritis(especially given that the drug is so safe that they have never reached a maximum tolerable dose).
If they have the clinical data to substantiate these claims, then the market potential for oral salmon calcitonin is much bigger than my previous estimate (see my last Emisphere article) and my $50 price target is way too low.

Disclosure: Author holds a long position in EMIS