2 Healthcare Companies Expecting September Catalysts

by: Spencer Knight

The FDA will take a breather in September as there are no scheduled PDUFA and one Advisory Committee meeting for Johnson & Johnson (NYSE:JNJ) that I will not discuss since I am not expecting this event to produce a catalyst. However there will still be other catalysts investors should watch out for. Typically catalysts for healthcare and biotechnology companies can cause massive pops or unfortunate drops. Keep in mind the two major catalysts for September are speculative as no exact dates have been given. However, based upon the facts given by the respective companies we can speculate the action dates.

The only scheduled PDUFA was for Adventrx's (ANX) lead drug Exelbine. This action date was scheduled for September 1st, however the FDA handed down a decision on August 9th. The CRL stated the drugs used in Exelbine's bioequivalency study could not be verified. In other words, the company may have not used the stated drugs for comparison. Because of this Adventrx has been asked to begin a new bioequivalency study. This would nearly evaporate the company's $40 million in cash. Adventrx may even "discontinue the Exelbine program" according to CEO Brian Culley. At this point it may be in the best interest of the company to discontinue the project and focus on ANX-514.

As expected the share price dropped nearly 60% after the CRL. From an investor standpoint I would stay away from Adventrx at all costs because there are at least two reasons the FDA was not able to verify the drugs. First, Adventrx used sloppy data, and second the company actually used different drugs than stated in the NDA. This is concerning for long term Adventrx investors because the company may suffer the same fate with ANX-514 and ANX-188. Not to mention if Adventrx does not scrap the Exelbine program, we may be looking at a two-three year period before any approval for the treatment.


Amarin (NASDAQ:AMRN) plans to file an NDA for AMR101 in the third quarter. Therefore this filing should happen in September. AMR101 had been developed to treat hypertriglyceridemia. Hypertriglyceridemia is simply the process of having too many triglycerides, which can cause weight gain. Normal triglyceride levels are anything below 150 mg/dL. The first indication of AMR101 will be for triglyceride levels above 200 mg/dL and less then 500 mg/dL. AMR101 will also be applied for triglyceride levels above 500 mg/dL. The company plans to make the drug available for 150-199 mg/dL patients in the future. This would give the company a strong grip on the triglyceride market.

NDA filings can bring catalysts for small companies because it is a step in the right direction for product approval. Looking at the stock right now the NDA may not be priced into the stock. While the share price did spike up above 17 after the ANCHOR trial results were released, the stock has slowly slid. This may set up for another pop in price on the filing and acceptance of the NDA because investors will be reminded how close Amarin is to getting AMR101 on the market. Please note the company has recently faced a patent rejection for AMR101, but this should be resolved long before the FDA rejects or accepts the drug for market.

Alimera Sciences

Alimera (NASDAQ:ALIM) is looking to receive approval for Iluvien in the United Kingdom. Alimera filed an MAA with the United Kingdom's regulatory committee on July 8, 2010 and should be receiving a decision within the next couple months based upon the standard 12-13 month review period. While the United Kingdom has not given an exact date, September could be the month Iluvien is decided upon. Iluvien has been designed to treat diabetic macular edema (DME). While I have been excited about this drug in the past, the excitement has faded as the chances of approval are slipping. It is important to remember pSivida (PSVD) will receive up to $66 million on approval and 20% of future profits from the drug. However Alimera will attempt to buy the drug outright as the company has tried to do since 2008.

With the FDA rejection in December of 2010, it appears the United Kingdom regulators will follow suit. Also, it is important to note the FDA will decide upon Iluvien for a second time in November of 2011. Therefore Alimera may have two potential catalysts in the near future. It is important to note the MAA decision is not guaranteed, I am simply speculating the decision will come about as it has been nearly 14 months since the MAA was filed. A rejection from the British committee might already be into the stock. Therefore any or both committees approving the treatment will cause a huge pop in share price. Unfortunately I do not see this happening because the FDA appears to be setting up a long delayed rejection of Iluvien.

While the CRL did not require new trials, the FDA did ask for further analyses of the FAME trial, which tested the safety and effectiveness of Iluvien. The FDA asked for data after 36 weeks of the FAME study, which means the FDA could outright reject the drug stating the 36 week data does not meet safety or effectiveness. While some may argue asking for 12 more weeks of data is positive, I would not place any large bets on approval. Especially because a blockbuster drug that treats DME will see some serious action from traders. Any approval or rejection will be a serious catalyst for the stock. The next two months should be interesting for Alimera. As I have previously stated, I am interested in Iluvien. Also, please note I am not financially interested in Iluvien, simply intrigued with the new technology that may be used for future diseases as well.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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