Javelin Pharmaceuticals Still On Target With Dyloject

| About: Javelin Pharmaceuticals, (JAV)
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Javelin Pharmaceuticals (AMEX: JAV) provided investors with an update on the status of Dyloject and other pipeline drug candidates last Thursday at the UBS Global Life Sciences Conference. The company’s CEO was absent at the conference because he was in Europe preparing for the UK launch of Dyloject, pending EMEA approval. Javelin expects approval imminently and plans to launch Dyloject in the UK during the fourth quarter and they expect to record revenues from the sale of this product in the UK during 2007.

Dyloject is subject to a mutual recognition process for its initial European launch, first in the UK during 4Q07 and then following in Germany after six to nine months. The Company estimates peak sales of Dyloject, an injectable form of the anti-inflammatory & pain medication diclofenac, in Europe after 12 months of $75 million once formulary issues are resolved over the first two to three months of marketing. A launch in the US market is expected by late 2008 or early 2009 with a domestic sales potential of over $175 million. Dyloject will be targeted to hospitals for use in acute care settings as a non-opiate option for pain relief that has fewer side effects and no addiction potential. Javelin expects to report results in late 2007 or early 2008 from the first of two studies of Dyloject in the evaluation of abdominal and orthopedic pain trials in the US.

The Company currently has roughly $50 million in cash, 48 million shares outstanding, and a cash burn rate of about $2 million per month with an expected increase upon Dyloject approval & launch for manufacturing and marketing costs. The Company's other products in development include Rylomine, an intranasal formulation of morphine that is in Phase 3 trials for the treatment of acute moderate-to-severe pain in the US & Europe; and PMI-150, which is a proprietary nasal formulation of ketamine that is under registration studies for the treatment of acute moderate-to-severe pain. I rate the stock a buy with an $8 ($384 million market cap) end of year target and a $12-plus ($576 million market cap) price target by the end of 2008 given European & US peak sales potential of at least $250 million for Dyloject alone, which exceeds the Company’s current market cap of just $244 million.

Disclosure: Author owns shares of Javelin Pharma.