Your Daily Pharma Scoop: Valeant's B+L In India, TXMD's NDA Resubmission, Melinta Makes An Acquisition

| About: Valeant Pharmaceuticals (VRX)

Summary

We discuss Bausch and Lomb’s India sales, and whether that has any bearing on Valeant’s woes.

TXMD resubmits its NDA for TX-004HR.

Melinta bought MDCO’s infectious disease business.

This abridged “Daily Scoop” is published by Avisol Capital Partners, which runs the physician-managed Total Pharma Tracker healthcare investment research service on Seeking Alpha Marketplace.

Analysis of top Seeking Alpha coverage: Valeant B+L

This is a tidy little article about Valeant (VRX) we will be discussing today, authored by Peter Tan, titled “Valeant's Bausch & Lomb India - E-Commerce Popularity.” This is a study of the contact lense market in India. The study looks at two popular e-commerce websites in India, Amazon India, and Flipkart. It does some original research, trying to understand the popularity of various contact lense brands in India based on searching for contact lense on these two sites, and then it concludes that “India is tilted in favor of Bausch & Lomb.”

B+L has a decades old presence in India. We remembers shops in our local cities in the early 1990s showcasing Bausch and Lomb products. This was around the same time when the company entered into the Indian market with a JV with RayBan Optics India. So those things are there; however, the author may be making couple mistakes in his analysis.

Number one, Amazon and Flipkart may be the largest e-retailers in India, but most people do not buy their wearable optics from them. There are specialized contact lens and glasses companies like Lenskart and Vision Express where much of the traffic must be going. Then there are a number of regional players, like GKB Opticals in Bangalore and elsewhere, Lawrence and Mayo, and players eye hospitals like Shankara Nethralaya, where urban traffic will be going. So, while we cannot argue with the conclusion without more data, the method certainly has its problems.

The other problem is the premise that the online market reflects in any way the actual market. At least anecdotally, this quite internet-savvy author can vouch for the fact that he has never purchased any sort of prescription optics online. Yes, my recent purchase of a pair of glasses from Lenskart after I lost the earlier one in the Arabian Ocean was done online, but it was still done via a brick-and-mortar shop. Bottomline is, the e-retail market simply does not reflect the real market, where other methodology will be required to see how big a presence B+L has.

Another factor not moot to the discussion is that the Indian market is still nascent, widely diversified, and does not make more than a few paltry million dollars for B+L. As the author states: “Based on Euromonitor report, it is expected that the demand for contact lenses to be strong in this India market, with a constant 13% CAGR till 2021, reaching about Rs 11 billion (USD$171 million). Right now, Johnson & Johnson's (NYSE:JNJ) Acuvue is leading with 34% market share, while Bausch & Lomb is at 32%. If the 32% market share remains constant, Bausch & Lomb will be having an annual income of $54.6 million by 2021 from its Indian consumers.”

That isn’t really paltry per se, but when you compare that with B+L’s total revenue from their international segment (“Full year 2016 revenues in the Bausch + Lomb/International segment were $4,607 million as compared to $4,603 million for 2015.”) we see this is a mere 1/100th part or so at present, probably less. And when we compare all that to Valeant’s humongous debt of some $25bn, we see that discussing India revenues for Valeant’s B+L segment has no investment angle to it. Yes, interesting, even quaint facts, no doubt, but nothing that will help VRX anytime soon.

Stocks in the news: TXMD, ZGNX, ALDX, MLNT, GNMSF, ADMP

TherapeuticsMD resubmits U.S. marketing application for TX-004HR; shares up 1% after hours

Company: TherapeuticsMD (TXMD)

Co Name

TherapeuticsMD Inc

Ticker

TXMD

Focusarea

women helthcare

Today's Price

$6.07

52-week high

$8.30

52-week low

$3.50

%diff--52w-low

73.43

Mktcap

1.3B

Volume

3,742,937.00

CashBalance

149M

Therapy: TX-004HR (estradiol vaginal softgel capsule)

Disease: moderate-to-severe vaginal pain during sexual intercourse (dyspareunia).

News: TherapeuticsMD (NYSEMKT:TXMD) is up 1% after hours on modest volume in response to its refiling of its U.S. marketing application seeking approval for TX-004HR (estradiol vaginal softgel capsule) for the treatment of women with moderate-to-severe vaginal pain during sexual intercourse (dyspareunia).

The company received a CRL in April citing the need for long-term safety data.

Analysis: TX-004HR received a CRL earlier this year, in May. The FDA raised a concern regarding the lack of long-term endometrial safety data for TX-004HR beyond the 12-weeks studied in the pivotal phase 3 Rejoice Trial. However, the company in its press release disagreed with the FDA, stating that no cases of endometrial hyperplasia were observed in the Rejoice Trial at the end of week 12 for all the doses studied and included in the NDA. The positive here is that the CRL did not identify any efficiency issues for TX-004HR and did not identify any approvability issues related to chemistry, manufacturing, and controls. So TXMD claimed that this was a manageable CRL that will not even require a new trial. So here we are with the resubmission. Competition exists in the form of Intrarosa from AMAG Pharmaceuticals (AMAG), the only FDA-approved, vaginally administered, daily, non-estrogen product for the treatment of moderate-to-severe dyspareunia. The market is widely geneticised, and given TXMD’s current humongous market cap of $1.31bn, one wonders if there’s anything left to be factored in.

Adamis Pharma files U.S. marketing application for expanded use of Symjepi

Company: Adamis Pharmaceuticals (NASDAQ:ADMP)

Co Name

Adamis Pharmaceuticals Corp

Ticker

ADMP

Focusarea

allergy and respiratory disease

Today's Price

$3.50

52-week high

$6.45

52-week low

$2.55

%diff--52w-low

37.25

Mktcap

116M

Volume

672,328.00

CashBalance

24M

Therapy: Symjepi (epinephrine)

Disease: emergency allergic reaction med

News: Adamis Pharmaceuticals (NASDAQ:ADMP) files an application with the FDA seeking approval to use emergency allergic reaction med Symjepi (epinephrine) in pediatric patients weighing 33 - 65 pounds. It is currently approved for patients weighing at least 66 pounds.

Analysis: Adamis (ADMP) was a $167mn nanocap when I wrote the following:” .. a fully patent-owned FDA approved product in its portfolio in a market worth $1.2bn where the two currently dominating players are under enormous pressure and trouble; and the company has a portfolio of 3 related products, also patent-owned, which can sustain the momentum.” Now it is down to $116mn, although there was a 8% spike afterhours on the news. This new label expansion, if approved, will significantly increase Symjepi’s market.

Genmab earns $20M milestone from Janssen on daratumumab advancement

Company: Genmab A/S (OTCPK:OTCPK:GNMSF)

Co Name

GENMAB AS

Ticker

GNMSF

Focusarea

chronic lymphocytic leukemia (CCL)

Today's Price

$193.00

52-week high

$239.75

52-week low

$159.25

%diff--52w-low

21.19

Mktcap

11.8B

Volume

695.00

CashBalance

1B

Therapy: DARZALEX (daratumumab)

Disease: multiple myeloma

News: Genmab A/S (OTCPK:OTCPK:GNMSF) has earned a $20M milestone payment from licensee Janssen Biotech (NYSE:JNJ) triggered by the progress made in a Phase 3 clinical trial evaluating DARZALEX (daratumumab) in an indication other than multiple myeloma.

Analysis: Genmab (OTCPK:GNMSF) is one of the top midsized European biopharma with a very strong R&D segment. Darzalex is one of its two approved products. The company has strong partnerships with GlaxoSmithKline (GSK) and Amgen (AMGN). Janssen’s (JNJ) Darzalex, developed by Genmab, can be a major challenger to Revlimid, Celgene’s (CELG) highest revenue-generating drug.

Melinta to buy The Medicines Co's infectious disease business for $265M

Company: Melinta Therapeutics (NASDAQ:MLNT)

Co Name

Melinta Therapeutics, Inc.

Ticker

MLNT

Focusarea

life-threatening infections

Today's Price

$15.20

52-week high

$41.00

52-week low

$10.25

%diff--52w-low

48.29

Mktcap

332M

Volume

131,279.00

CashBalance

17.6M

News: Melinta Therapeutics (NASDAQ:MLNT) inks an agreement with The Medicines Company (NASDAQ:MDCO) to acquire its infectious disease unit, including Vabomere (vaborbactam/meropenem), Orbactiv (oritavancin) and Minocin IV (minocycline).

Analysis: Melinta has been on a buying spree lately, consolidating the infectious disease market by buying up Cempra and then The Medicines Company’s infectious disease unit, which the company was trying to sell out for a while now. The ID market does need some consolidation, because infectious disease is a difficult market for smaller players due to lack of pricing power.

In other news, Zogenix (ZGNX) has started enrolling in a Phase 3 clinical trial assessing lead candidate ZX008 (low-dose fenfluramine hydrochloride) for the adjunctive treatment of seizures in patients with Lennox-Gastaut syndrome, a rare and severe form of childhood epilepsy. And Aldeyra’s (ALDX) topical reproxalap (formerly ADX-102) in patients with noninfectious anterior uveitis showed it to be non-inferior to Pred Forte (prednisone acetate), a topical steroid for ophthalmic use, in reducing anterior chamber inflammatory cell count. Topline results from a phase 3 trial will be out in mid-2018.

Much of our research is available here on Seeking Alpha for free. Simply click on the “Follow” button next to the article title to get these articles as soon as they are published. However, some of our research is more strategy-oriented; that research is aimed at investors and traders in the healthcare sector who want more directional guidance. It also includes a watchlist and multiple model portfolios, a whatsapp group, a discussion board and other tools to help you invest in healthcare better. All this is available at a discounted price for initial subscribers. If you are really interested in our work, consider becoming a Total Pharma Tracker member today!

Analyst Ratings

Allergan (AGN): Morgan Stanley upgrades from equal weight to overweight and raises target from $171.92 to $200.00. See also Avisol's coverage.

Omeros (OMER): HC Wainwright sets target of $30.00 with buy rating. See also our recent analysis of OMER.

Teva Pharmaceutical Industries (TEVA): Mizuho raises target from $12.00 to $16.00 while reiterating neutral rating. See also our coverage of TEVA.

More ratings in below table.

Company

Ticker

Analyst

Action

Rating

Target

Adamas Pharmaceuticals

ADMS

Northland Securities

Initiates

Outperform -> Outperform

AEterna Zentaris

AEZS

HC Wainwright

Set Price Target

Buy

$3.00

Align Technology

ALGN

Robert W. Baird

Reiterates

Buy

$290.00

Ardelyx

ARDX

Citigroup

Raises Target

Buy -> Buy

$16.00 -> $17.00

Boston Scientific

BSX

Canaccord Genuity

Lowers Target

Buy -> Buy

$36.00 -> $35.00

Boston Scientific

BSX

Oppenheimer

Reiterates

Hold

Boston Scientific

BSX

J P Morgan Chase & Co

Reiterates

Buy

Collegium Pharmaceutical

COLL

Piper Jaffray Companies

Set Price Target

Buy

$19.00

Catalyst Pharmaceuticals

CPRX

SunTrust Banks

Reiterates

Buy

$6.00

Cytokinetics

CYTK

Needham & Company LLC

Downgrades

Strong-Buy -> Buy

$22.00 -> $12.00

DelMar Pharmaceuticals

DMPI

HC Wainwright

Set Price Target

Buy

$12.00

Evoke Pharma

EVOK

HC Wainwright

Set Price Target

Buy

$9.00

Edwards Lifesciences

EW

Canaccord Genuity

Reiterates

Buy

$137.00

EXACT Sciences

EXAS

Bank of America

Raises Target

Buy

$58.00 -> $67.00

Foamix Pharmaceuticals

FOMX

HC Wainwright

Set Price Target

Buy

$12.00

ObsEva

OBSV

HC Wainwright

Set Price Target

Buy

$25.00

Pacira Pharmaceuticals

PCRX

Mizuho

Downgrades

Buy -> Neutral

$53.00 -> $44.00

Xencor

XNCR

Cantor Fitzgerald

Initiates

Overweight

$33.00

Zoetis

ZTS

Morgan Stanley

Upgrades

Equal Weight -> Overweight

$80.00

Insider Sales

Beigene, Ltd. (BGNE): CEO & 10% shareholder Oyler John disposed 85906 shares for $7,272,904.

Bellicum Pharmaceuticals, Inc (BLCM): CFO & Treasurer Musso Alan A disposed 6206 shares for $61,382.

Cannabis Sativa, Inc. (OTCQB:CBDS): CEO Gravel Mike disposed 22700 shares for $88,435; Director Goldsberry Debby disposed 1500 shares for $5,700.

Mei Pharma, Inc. (MEIP): Director Baltic Charles V. III disposed 11000 shares for $24,272.

Insider Purchases

Asterias Biotherapeutics, Inc. (AST): President & CEO Mulroy Michael H. acquired 2076 shares for $5,003.

Kempharm, Inc (KMPH): EVP Govt./Public Relations, Cohen Daniel L acquired 7500 shares for $28,423.

Mei Pharma, Inc. (MEIP): Director Baltic Charles V. III acquired 11000 shares for $24,801.

Sonoma Pharmaceuticals, Inc. (SNOA): CEO Schutz James J acquired 400 shares for $2,012.

Vbi Vaccines Inc/bc (VBIV): CEO & President Baxter Jeff acquired 15000 shares for $71,250.

Earnings

Benitec Biopharma Limited (BNTC) reported a net loss of A$ 2.9 million for the first quarter of the year, down from a profit of $0.8 million it had reported for the first quarter of FY2017. The company reported A$ 14.7 million worth of cash on hand at the end of the September 2017 quarter.

Secondary Offerings

Company Name

Ticker

Price

Stock Offered

Biopharmx Corp

BPMX

$0.15/Share

$6.8 Million

Heat Biologics Inc.

HTBX

$0.43/Share

$2.5 Million

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.

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