Dova Pharmaceuticals Looks To Expand Market Opportunity With Doptelet Targeting Another Indication

|
About: Dova Pharmaceuticals, Inc. (DOVA)
by: Terry Chrisomalis
Summary

Dova Pharmaceuticals reported Q4 earnings that were almost in line with expectations. There was a beat in EPS but a slight miss in revenue.

The company has already received FDA approval for Doptelet to treat patients with thrombocytopenia due to chronic liver disease.

The intention of Dova is to expand approval to patients with chronic ITP, which will help expand the market opportunity possible for Doptelet.

Dova had $104.6 million in cash and equivalents as of December 31, 2018, which is enough cash to fund operations for the next 12 months. Approval in chronic ITP would result in an earlier cash raise.

Dova Pharmaceuticals (DOVA) is a good biotech to look into because of its ability to use Doptelet to target patients with thrombocytopenia due to many different causes. Specifically, this biotech has been successful in developing a treatment for thrombocytopenia due to chronic liver disease (CLD). I think there is more upside for this biotech, especially with the focus to target the many other indications associated with thrombocytopenia.

Earnings For Doptelet

Doptelet has already been approved by the FDA to treat patients with thrombocytopenia due to CLD. The drug launched back in June of 2018 and since then, sales have been somewhat moderate. The good news is that the most recent earnings were almost in line. The Q4 EPS came in at -$0.69 which beat estimates by $0.09. The revenue, on the other hand, came in slightly lower than expected, but it wasn't by much. It was shown that revenue came in at $2.84 million for the quarter, but the miss was only by $130,000. In my opinion, this is not that bad at all. The reason why I say that is because in the coming quarters, revenue should improve. This is especially true because in the earnings update, Dova noted that it has a new marketing strategy it is working on. This strategy is expected to be implemented by Q2 of 2019. With new management in place, along with a potentially renewed marketing strategy, I believe sales should start to increase over time. As of December 31, 2018, Dova had $104.6 million in cash and equivalents. Based on the current estimate, the biotech believes it has enough cash to fund operations for at least the next 12 months. However, I believe that an approval on June 30, 2019, for Doptelet in chronic ITP could cause an earlier cash raise than expected.

Doptelet Expansion

The approval of Doptelet was a good first step, hopefully, sales will pick up for the drug in the upcoming earnings release. However, it's a good thing that Dova is also expanding the drug into other indications. The first of which involves chronic immune thrombocytopenia. With this disease, patients produce antiplatelet autoantibodies and white blood cells that target the platelets in the patient's body. This leads to the thrombocytopenia or reduced platelet count, which yet again causes severe bleeding and bruising. The population for this indication is not that bad. There are about 60,000 adults in the U.S. who have chronic immune thrombocytopenia (ITP). This program is in good shape because before the end of 2018, the FDA accepted the supplemental NDA (sNDA) for Doptelet to treat chronic ITP. The biotech is seeking expansion approval for the drug to be used in this indication as well. The wait for the PDUFA date of this sNDA will not be that long. That's because the FDA is expected to make a decision for approval of Doptelet for this indication by June 30, 2019. It is believed that Doptelet for this indication could produce sales of up to $100 million by 2022. However, long term is different. That's because it estimated that this market could reach $800 million in the U.S. alone and then $1.5 billion globally. The rationale for the FDA accepting the application was because of the phase 3 study, which yielded positive results. The phase 3 study had met all the endpoints. It met the primary endpoint which was the amount of weeks with the platelet count ≥50x109/L in the absence of rescue therapy. Then, it had also met on the secondary endpoint as well, which was the amount of patients with platelet counts ≥50×109/L on Day 8. Both of these endpoints were met with statistical significance and a p-value of p <0.0001.

Conclusion

Dova Pharmaceuticals had a decent earnings report for the quarter. While Doptelet sales barely missed expectations in terms of revenue, I believe that the coming quarters should start to see an improvement in a renewed marketing strategy. In addition, there is the PDUFA date that is approaching for potential approval of Doptelet in chronic ITP. The additional indication will only serve to boost the potential revenue earned by Dova. There are a few risks involved. The first of which is that there is no guarantee that the next earnings report will meet or beat expectations. In that case, the stock could fall by 20% or more. The second risk is that there is no guarantee the FDA will approve Doptelet for the chronic ITP indication. However, I feel that based on the safety and efficacy data reported, Dova has a good shot at receiving FDA approval for this next indication as well.

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.