Antares Looks Strong Ahead Of Multiple FDA Decisions

| About: Antares Pharma (ATRS)
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Summary

Antares Pharma to receive the FDA decision for Xyosted by October 20 this year.

The drug-device combo will help the company generate new revenue stream and diversify its portfolio.

The company is also set to receive the FDA decision for Makena injector later this year.

Antares Pharma Inc. (NASDAQ:ATRS) focuses on developing self-administered parenteral pharmaceutical products and technologies. The company has delivered solid performance in the past as it created a niche market for itself in the form of injection devices. It is now looking for diversifying its portfolio and is in line to receive the FDA decision on its Xyosted combo product. The company also recently submitted its sNDA for Makena injector. These upcoming catalysts are expected to help the company stock retain its upward trajectory in the medium term.

Antares has a widely diversified portfolio of injection devices. The company is currently awaiting the FDA decision for its potential star earner Xyosted. Previously known as QuickShot Testosterone, Xyosted has its PDUFA on October 20 later this year. The drug has been developed as a once a week subcutaneous injection of testosterone enanthate, which ensures the extended release of the hormone into the bloodstream. With Xyosted, the company is making a divergence from its focus on injecting devices. This drug-injector combo offers a new innovation in TRT drug market.

The market for testosterone drugs has been on the rise, owing to greater awareness about health and vitality. Despite certain setbacks such as bolstered FDA oversight, the market still remains strong. Various reports suggest that the global market for TRT drugs is expected to reach $1.3 billion by 2022. The estimates seems to be on the conservative side as another report shows that nearly 39 percent of men over the age of 40 suffer from hypogonadism, and thus form a potential market for TRT drugs.

Further, injectable TRT drugs are gaining ground at the expense of topicals and gels. With its robust portfolio of injection devices, Antares is in position to develop TRT drugs which can overcome the current constraints associated with injectible hormone. The constraints are mainly related to the pain and the inconvenience associated with the injections. Antares seems to be preparing well for the potential approval of Xyosted. The company recently announced its new financing deal with Hercules Capital. Under this deal, Antares is entitled to a term loan of up to $35 million. The company CEO stated that a portion of the funds will be utilized for the launch of Xyosted. The first tranche of $25 million was disbursed following the execution of the loan. The financing scheme not only underscores the management's commitment to focus on Xyosted, but will also ensure that the company retains its liquidity position.

Antares has another milestone coming up as well. It recently filed its supplemental new drug application for its Makena subcutaneous auto injector. The company has developed the device in collaboration with AMAG Pharmaceuticals. The FDA decision is expected to arrive in the fourth quarter and the company expects a launch within the same quarter. The drug-device combo uses Antares' QuickShot® auto injector.

Antares had recently announced its quarterly results, which showed its revenue at $12 million. The company's net loss for the quarter stood at $4.7 million, showing significant improvement over the loss of $7.7 million it had reported for the corresponding quarter of the past year. The impact of these developments is clearly visible on the performance of the company's stock, which has gained over 27 percent this year so far. The stock's 12 months performance stands at an impressive 183 percent. While the stock is currently trading close to its 52 week highs of $3.24, it is expected to keep up the momentum on account of upcoming catalysts. Any pullback at the present price level offers an exciting opportunity for short to medium term investors to build a position in the stock.

While the company has done well in curtailing its net losses and boosting its product portfolio, there are certain risks attached to it as well. The TRT market has lost some of its sheen due to increased FDA oversight. In order to control the misuse of these drugs, the FDA now only approves the use of these drugs on prescription for hypogonadism. The regulatory authority also places label restrictions on the approved drugs. These measures have slowed the market growth rate. Apart from this, the anticipated increase in its stock price is strongly correlated to its potential drug approvals. In case of any setback including rejection, the stock may reverse its upward trajectory. The company's liquidity may also be strained on account of multiple launches and other operating expenses. This being said, it is safe to assume that the chances of any negative FDA decision are rather slim, leaving Antares with solid prospects ahead.

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

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.