AbbVie And ANI Pharmaceuticals Appear Poised To Announce A Deal For LibiGel

| About: AbbVie Inc. (ABBV)
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Summary

In 2013, ANI Pharmaceuticals' CEO stated that he would look for a partner to take the lead and co-promote on LibiGel. AbbVie appears to be the partner.

LibiGel to treat much more than HSDD. It also reduces cardiovascular (CV) events by 70% in postmenopausal women at higher risk of experiencing a CV event.

LibiGel is potentially a $2.4 billion blockbuster just by switching existing off-label and compounded testosterone prescriptions.

In August 2013, approximately six weeks after the merger between ANI Pharmaceuticals (NASDAQ:ANIP) and BioSante Pharmaceuticals, I spoke with Arthur Przybyl, CEO of ANI Pharmaceuticals. During our conversation, he indicated that LibiGel was very interesting, but was still a distant proposition. He said he would eventually be examining LibiGel in closer detail, regarding HSDD, cardiovascular benefits, etc., and see where it goes from there. His goal was to partner with a larger pharmaceutical company and have the partner finance any additional trial(s) and regulatory approvals and co-market LibiGel (50/50) if and when approved.

The following supports the possibility that ANI Pharmaceuticals has found a partner for LibiGel in AbbVie (NASDAQ:ABBV).

ANI Pharmaceuticals And AbbVie Connections

Patent Applications

On October 21st, 2016, both ANI Pharmaceuticals and AbbVie filed new patent applications. They are presently pending.

AbbVie filed patent application #15/331,573 on 10-21-2016 claiming the benefit of patent application 09/651,777, which received a patent for a "Pharmaceutical composition and method for treating hypogonadism."

ANI Pharmaceuticals filed patent application #15/331,360 on 10-21-2016 claiming the benefit of 13/135,224, a patent application initially titled "Method for treating sexual dysfunction while decreasing cardiovascular risk."

At first glance, this might look like a mere coincidence, until you consider the following.

Both patent applications relate testosterone. According to the Public Pair website, under the Continuity Tab of patent application #09/651,777 (Patent #6,503,894) it listed patent application #10/153,468, entitled "Method of increasing testosterone and related steroid concentration in women," as Child Continuity Data.

When looking under the Continuity Data Tab of patent application #10/153,468, it listed the patent application as a continuation of and division of patent application #09/651,777.

Note: Claims within patent application #10/153,468 assigned prior art and was used by the patent examiner to reject the cardiovascular risk reduction claims in ANI Pharmaceuticals' patent application #13/135999, titled "Method for decreasing cardiovascular risk in postmenopausal women."

It also appears that AbbVie's Patent Application #10/153,468 filed by Unimed Pharmaceuticals, an AbbVie subsidiary, was rejected for lacking the clinical evidence to support the claims. ANI Pharmaceuticals' patent applications have the clinical evidence, but were rejected when the examiner assigned prior art to Unimed Pharmaceuticals' patent application.

ANI Pharmaceuticals had been prosecuting three patent applications, of which two have been abandoned for new patent application, presently pending. The new patent applications are claiming the benefit of the earlier patent applications. The third patent application is the one mention above. All are pending.

Now consider that on December 15, 2015, according to ANI Pharmaceuticals' patent application #13/135,224, the patent agent modified Claim #1 using some information from their other patent application and new claims regarding breast cancer. The claims read as follows:

  • Claim 1. (Currently Amended) A method for reducing the number of cardiovascular events in a postmenopausal woman, comprising: administering to the women a topical formulation comprising therapeutically effective amount of androgen, whereby administering the formulation results in a reduction in cardiovascular events in the woman compared to an expected number of cardiovascular events in an untreated postmenopausal woman, and wherein the reduction in the number of cardiovascular events is reduced, and wherein the reduction in the number of cardiovascular events is reduced by at least 70% compared to the expected number of cardiovascular events for a postmenopausal women.
  • Claim 29. (New) The method of Claim 1, wherein the method also reduces the number of breast cancer events.
  • Claim 30. (New) A method for reducing the number of breast cancer events in a postmenopausal woman comprising: administering to the woman a topical formulation comprising a therapeutically effective amount of androgen, whereby administering the formulation results in a reduction in breast cancer events in the woman compared to an expected number of breast cancer in an untreated postmenopausal woman.
  • Claim 31. (New) The method of Claim 30, wherein the androgen is testosterone.

Interestingly, on December 15, 2015, ANI Pharmaceuticals' patent agent filed as a large entity and later sought a refund, since ANI Pharmaceuticals is a small entity. It makes me wonder if AbbVie, which is considered a large entity, was supplying the data to support the patent application claims regarding the reduction of breast cancer events.

January 26, 2012, the United States Patent Trade Office published a patent application assigned to BioSante Pharmaceuticals. According to the patent application titled "Methods for decreasing cardiovascular risk in postmenopausal women":

  • Restoring testosterone levels to pre-menopausal levels decreases the risk of cardiovascular events in postmenopausal women who are at high risk for a cardiovascular event by 71%.
  • Cardiovascular events include: a cardiovascular death, a non-fatal stroke, a non-fatal myocardial infarction, hospitalized unstable angina (including acute coronary syndrome), angioplasty, coronary bypass surgery, a pulmonary embolism and deep vein thrombosis.
  • "High risk of cardiovascular events" means a woman has a minimum of a two-point cardiovascular disease risk factor as determined by the following point scale:

1) Age 60 to less than 70 years (1 point),

2) 70 years or greater (2 points),

3) diabetes mellitus (2 points),

4) presently smoking at least 10 cigarettes/day (or the equivalent, e.g. uses chew tobacco a minimum of two hours daily) (1 point),

5) blood pressure (1 point): systolic.gtoreq.150 mmHg and/or diastolic.gtoreq.95 mmHg (based on two readings taken at least 30 minutes apart) and/or taking antihypertensive medications (for treatment of hypertension),

6) dyslipidemia (1 point): LDL>160 mg/dl and/or HDL<45 mg/dl and triglycerides>250 mg/dl and/or taking lipid-lowering medication (over-the-counter products are not considered to be acceptable treatment forms),

7) ankle-brachial index<0.6 (2 points), and

8) documented history of cardiovascular disease, i.e., myocardial infarction, stroke, hospitalization for unstable angina/acute coronary syndrome, revascularization of the coronary, carotid, or peripheral circulations.

January 5, 2012, the USPTO published a patent application assigned to BioSante Pharmaceuticals titled "Methods for treating sexual dysfunction while decreasing cardiovascular risk." This patent application claimed similar cardiovascular event reduction benefits the patent application published on January 26, 2012.

In comparing the patent application claims of January 5 and January 26, 2012, to the claims of December 15, 2015, you will see that they have gone from using "decreases the risk of cardiovascular events" to "reducing the number of cardiovascular events." In addition to the new claims of "reducing the number of breast cancer events" which did not form part of the patent applications published in 2012.

LibiGel Safety/Efficacy Trial

According to the American Heart Journal's article, titled "A cardiovascular safety study of LibiGel (testosterone gel) in postmenopausal women with elevated cardiovascular risk and hypoactive sexual desire disorder":

  • Study procedures included: office visits which were to occur at 3, 6, and 12 months post-randomization and yearly thereafter. Subjects were instructed to contact sites if they believe that they had experienced a cardiovascular or breast cancer event. At each scheduled contact, participants were asked about adverse events, healthcare and hospitalizations. They were also questioned about specific androgenic side effects, potential cardiovascular and breast cancer events. In addition they were to undergo other safety and tolerability assessments along with laboratory test.
  • Efficacy was also being evaluated at office visits and telephone contacts. They used the Subject Global Assessment and Perception of Benefit Questions. Participants who discontinue study drug were encouraged to complete all study visits, examinations, and questionnaires and to report potential CV events and breast cancer.
  • Breast and endometrial safety examinations and mammographies were to be performed at baseline and annually. In addition endometrial biopsies were to be performed at baseline and at study years 1, 2, and 5.

After BioSante Pharmaceuticals (now ANI Pharmaceuticals) announced the proposed merger with ANI Pharmaceuticals, the company stated it would be securing the data collected from the Safety/Efficacy study for future analysis. BioSante Pharmaceuticals was to stop any further analysis regarding LibiGel and preserve cash as part of the merger agreement with ANI Pharmaceuticals. It should be noted that ANI Pharmaceuticals is capable of manufacturing hormones and had a large manufacturing capacity.

The FDA required that each of the 3,656 patients enrolled in the LibiGel Safety/Efficacy study be followed up for five years. According to the October 4, 2011, clinical trial update, the last follow-up date for the patients was anticipated to be August 2016.

September 4, 2012, BioSante Pharmaceuticals halted the Safety/Efficacy study with 7,300 patient years of exposure data collected. BioSante Pharmaceuticals believed that it sufficiently established LibiGel's pre-approval safety. This equates to just under 40% of the 18,280 patient years of data that would have been collected had all 3,656 patients completed the five year follow-up. If the full safety follow-up were completed, there would have been approximately 10,968 additional office visits and they would have conducted an additional 6,580 endometrial biopsies.

ANI Pharmaceuticals Could Not Have Completed the Analysis

Prior to the announcement of the merger with ANI Pharmaceuticals, Stephen Simes, CEO of BioSante Pharmaceuticals, had estimated that it would cost between $6 and $10 million to complete analysis of the Safety/Efficacy data.

Note: The following financial figures are estimates, based on the assumption that in order to establish patent application claims regarding the reduction of breast cancer events, the five year follow-up for the majority of patients would have been required along with subsequent analysis.

Safety Follow-Up and Analysis Estimates:

Total R&D cost is estimated at between $16.9 million and $20.9 million.

ANI Pharmaceuticals' total R&D expenses for 2013 to 2015 and the first three quarters of 2016 totaled $10.035 million. This is in line with the expenses expected to grow its generic and specialty branded drug business. The numbers strongly point to someone else doing the R&D to support the breast cancer claims.

Marketing LibiGel

September 9, 2016, ANI Pharmaceuticals let the Trademark for LibiGel expire. To date, ANI has not filed for another trademark name to replace LibiGel.

On February 22, 2016, the deals.bio website updated the LibiGel page where it offered LibiGel as a licensing opportunity. However, it was never updated to include that LibiGel reduces cardiovascular events by at least 70% or that it reduces the number of breast cancer events, as stated in the patent applications.

The LibiGel page has been taken down from the deals.bio website. What you will see now is that ANI Pharmaceuticals is not presently offering any opportunities.

What you use to see if you look at the cache info, LibiGel was available as an opportunity.

Priority Review Voucher

August 19, 2015, AbbVie announced that it acquired the Priority Review Voucher (PVR) from United Therapeutics (NASDAQ:UTHR) for $350 million. The PVR was issued to United Therapeutics on March 10, 2015. One day earlier, on August 18, 2015, Sprout Pharmaceuticals receives FDA approval for Addyi, the first drug approved by the FDA to treat HSDD in premenopausal women.

Note: LibiGel was developed to treat HSDD for postmenopausal women.

Equally interesting is the fact that Dr. Louis W. Sullivan was the chairman of the Board for BioSante Pharmaceuticals through all of LibiGel's development. This included the cardiovascular event reduction discovery. He also led during the merger with ANI Pharmaceuticals. In addition, he has also been sitting on the United Therapeutics board since 2002.

Key BioSante Pharmaceuticals Personnel Related to AbbVie

March 2013, while ANI Pharmaceuticals and BioSante Pharmaceuticals were navigating the merger process, AbbVie hired Dr. Michael C. Snabes as its sr. medical director for men and women's health. Dr. Snabes was the study director for all LibiGel clinical trials. He is also listed as one of the inventors in the patent applications regarding the discovery that restoring testosterone levels to premenopausal levels reduces the number of cardiovascular events.

June 3, 2012, according to BioSante Pharmaceuticals' website, Pat Fuller was promoted from director of information technology to vice president of information technology. This is interesting as BioSante Pharmaceuticals' headcount had been reduced by 25% as a result of the disappointing efficacy trials in December 2011. In addition, in order for BioSante Pharmaceuticals to remain listed on Nasdaq, it had completed a 1:6 reverse split, which came in effect June 4, 2012.

Pat Fuller is also president and owner of the Technology Management Group which claims AbbVie as one of its key clients. Remember AbbVie was spun off from Abbott Laboratories (NYSE:ABT) January 1, 2013.

Marketing Opportunities For LibiGel

Hypoactive Sexual Desire Disorder

Upon reviewing BioSante Pharmaceuticals' Corporate Presentation dated 2011-01-10, and since there is presently no FDA approved testosterone competition, it is possible that LibiGel's initial price could be launched at approximately $600/prescription. LibiGel could generate annual run rate of exceeding $2.4 billion within several quarters of launch by switching over existing off-label and compounded testosterone presently being prescribed. It could conceivably generate $5.4 billion in annual revenue upon reaching the target of 9 million prescriptions suggested in the following slide, taken from BioSante's SEC filing:

Note: These projections were only for the United States market in 2011.

Reducing Cardiovascular Events

Let's look at the discovery that it reduces the number of cardiovascular events by 70%. According to the American Heart Journal's article, titled "A cardiovascular safety study of LibiGel (testosterone gel) in postmenopausal women with elevated cardiovascular risk and hypoactive sexual desire disorder," approximately 68% of the patients enrolled in the study suffered from hypertension. In addition, approximately 65% of the patients suffered from dyslipidemia; some obviously suffered from both. This was when 2,899 of the 3,656 patients had been enrolled.

Note: William B. White, MD, lead author of the article, was the chair of the Executive Committee of the larger LibiGel trial. Dr White is a past president of the American Society of Hypertension (ASH) (2012-2014). The Data Monitoring Committee included Henry R. Black, MD, past president of the ASH (2008-2010).

Considering that according to Hypertension in Postmenopausal Women, "the prevalence of hypertension in postmenopausal women is higher than it is in men, 41% of postmenopausal women becoming hypertensive worldwide, 25% of adult women are hypertensive, and in the United States, more than 75% of women older than 60 years of age are hypertensive."

Dyslipidemia

GlobalData's research, titled "Dyslipidemia - Global Drug Forecast and Market Analysis to 2023" indicates that dyslipidemia market is expected to grow to $37.9 billion by 2023. Assuming the licensing right for HSDD applies to the cardiovascular-related discovery, the following pie chart would allocate approximately 80.1% of the market covered by ANI Pharmaceuticals' licensing rights in 2023. The remaining global rights belong to Antares Pharma, Inc. (NASDAQ:ATRS), assuming the territorial division remained the same for the discoveries outside their agreements regarding HSDD.

Hypertension

According to Technavio's report on the "Global Hypertension Drugs Market 2016-2020":

"The prevalence of hypertension is high among the older population with close to 70% of the patients with high BP above the age of 60. Currently, close to 11% of the global population is aged 60 years or over and is estimated to reach nearly 22% by 2050."

Breast Cancer

According to Global Business Intelligence's research, the global breast cancer market is expected to reach $17.2 billion by 2021.

Statistical information on LibiGel's breast cancer event reduction estimations has yet to be publicly released. The patent application presently only claims that it reduces the number of breast cancer events.

Benefit to ANI Pharmaceuticals' Shareholders

ANI Pharmaceuticals' market cap has lately been hovering below $700 million and a price per share trading near $60. Since ANI never mentions LibiGel's development in the SEC filings or its presentations, it is safe to say that LibiGel has not been factored in the present share price.

If, as I suspect, ANI Pharmaceuticals and AbbVie announce a partnership, it should generate large increases in share price. How much and how fast it will increase will depend on how the information is released.

According to ANI Pharmaceuticals' 2016 Q3 filings, it presently has 11,580,392 outstanding shares, I would include an addition 2.4 million shares (approx.) that would most likely be converted from Convertible Senior Notes issued December 10, 2014. Therefore, you may wish to estimate your price target on 14 million outstanding shares.

Independent of LibiGel, ANI Pharmaceuticals has a strong pipeline which should generate above-average growth for years to come. However, the growth presently being projected by analysts does not factor in LibiGel, yet.

Benefit to AbbVie's Shareholders

AbbVie is under a great deal of pressure to generate revenue to eventually replace Humira's future revenue losses from biosimilars and competition from new drugs.

The potential market for LibiGel with all its possible indications should be a large blockbuster which will face no competition for a while in the United States. Especially since no testosterone drug presently exists for women. LibiGel's future revenue potential could help stabilize share price should AbbVie receive an unfavorable court ruling regarding patent protection.

Risks

Though LibiGel is presently covered by several patents, there is the risk that ANI Pharmaceuticals or AbbVie would be unsuccessful in obtaining patents to cover the cardiovascular and breast cancer reducing benefits. Likewise, there is always the risk that the FDA would reject an NDA submission. However, assuming it has 18,280 patient years of data supporting its claims, the likelihood of a rejection by the FDA has been greatly de-risked.

Conclusion

Upon looking back at the conversation I had with Mr. Przybyl in August of 2013, the series of events that has been presented is consistent with his statement that "LibiGel is a distant proposition." It has been almost 3 1/2 years since the merger.

In my opinion, the timing of events regarding patent applications, the apparent analysis of clinical data, AbbVie's acquisition of a PVR for $350 million and the hiring of Dr. Snabes seems to point Mr. Przybyl finding a partner in AbbVie.

However, neither BioSante Pharmaceuticals, ANI Pharmaceuticals nor AbbVie has ever confirmed a deal for LibiGel is in place, and it is possible that these events are all odd coincidences which are not linked. I leave it to you to be the judge.

In determining whether ANI Pharmaceuticals and AbbVie are about to formally announce a deal for LibiGel, or whatever the new name will be, consider the following:

  • Why did BioSante Pharmaceuticals or ANI Pharmaceuticals never disclose the 70% cardiovascular risk reduction discovery?
  • Why did BioSante Pharmaceuticals promote Pat Fuller to VP of Information Technology?
  • Why did BioSante stop the trial two months before it would have had the results from the Safety/Efficacy study?
  • Did AbbVie hire Dr. Michael Snabes to continue analyzing and follow on patients from the LibiGel trial?
  • Did Pat Fuller's work with AbbVie have anything to do with helping Dr. Snabes continue working on LibiGel?
  • Did AbbVie purchase the PVR for $350 million because Addyi had been approved the previous day?
  • Did Dr. Louis W. Sullivan influence the sale of the PVR to AbbVie?
  • Is AbbVie's PVR intended to be used on LibiGel?
  • Where did the data come from in order to support the new breast cancer reduction claims? This was approximately two years after BioSante Pharmaceuticals had allegedly boxed up the clinical data for future analysis.
  • How much would it cost to perform annual checkups and endometrial biopsies at years 2 and 5? Would this be needed to support the breast cancer-related claims?
  • How seriously were they looking for a licensing partner with respect to LibiGel?
  • Was additional data needed to support changing their claims for reducing the risk of cardiovascular events to reducing the number of cardiovascular events?
  • What are the odds of both ANI Pharmaceuticals and AbbVie filing new patent applications related testosterone on the same day? Especially with AbbVie's patent being linked to the prior art used by the examiner to reject ANI Pharmaceuticals' patent application claims.

If you concluded that ANI Pharmaceuticals and AbbVie have a deal in place for LibiGel, then AbbVie appears to have a hidden blockbuster on its hands, while ANI presents a very good buying opportunity. If approved by the FDA, the projected $2.4 billion generated simply by switching present off-label and compounded testosterone users to LibiGel could have a similar effect as if ANI Pharmaceuticals added $1.2 billion in revenue. ANI Pharmaceuticals is guiding between $128 million and $134 million for 2016. This obviously assumes a 50/50 co-promotion deal. A deal, let alone terms of a deal have yet to be announced.

Disclosure: I am/we are long ANIP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.