Although shares of PROLOR Biotech Inc (NYSEMKT:PBTH) have dipped below the five-dollar mark during the month of June, they jumped again by 5 percent on Tuesday after the company released news that it had represented data from an already-completed Phase II trial for hGH-CTP at ENDO 2012, the 94th Annual Meeting and Expo of the Endocrine Society.
The event was held in Houston, Texas, over June 23-26, and provided PROLOR with another grand stage to circulate the potential of hGH-CTP as a once-weekly injection for hormone-deficient adults, replacing the current standard of care that includes daily injections, seven days per week.
Before the recent sub-five dollar dip, PROLOR had been steadily rising in price all year long as key catalysts unfolded, including the release of positive results and the initiation of a hGH-CTP pediatric trial in Europe. The initiation of the pediatric trial should be viewed as a key validation of the product's success thus far in trials. The European medical authorities hold stringent standards regarding the initiation of trials in children and generally have to be overwhelmed with positive supporting adult data before issuing a go-ahead.
In regards to the confirmation of the Phase II data presented at ENDO 2012, Dr. Abraham Havron, CEO of PROLOR Biotech, noted:
"These data further confirm the potential of our long acting version of human growth hormone to be administered once-weekly, in contrast to the daily injections currently required. We believe that informing the broader endocrinology community about our progress with hGH-CTP is timely as we continue to enroll subjects in our Phase II trial in growth hormone deficient children and prepare to initiate a Phase III trial in growth hormone deficient adults, expected later this year."
The expected launch of the Phase III initiation later this year should provide another key catalyst for PROLOR, which would only be propelled by an eventual positive outcome from the European Phase II in children. Given the success thus far of hGH-CT and potential of the product to vault into a growing market that can already be measured in billions of dollars annually, analysts and big-time investors have started taking notice.
Morgan Joseph initiated coverage with a 'Buy' rating last year, with a price target significantly higher than where shares are currently trading. Maybe more notable, however, is the enthusiastic interest of Teva Pharmaceutical Industries Limited's (TEVA) Dr. Philip Frost. Frost already holds a major chunk of shares and his Teva connection fuels the buyout speculation that already accompanies discussions of PROLOR Biotech.
The key behind Prolor's already-demonstrated and future successes lies with the technology. PROLOR possesses world wide rights to the naturally-occurring Carboxyl Terminal Peptide (CTP), which, when attached to already-existing therapeutic proteins, stabilizes the proteins in the bloodstream, slows the process in which the protein is removed from the body, and therefore creates an extended life span for a therapeutic treatment without adding toxicity or sacrificing the desired biological activity.
This life-extending process is what allows the company to create longer-lasting treatments that can replace once-daily injections. Only two companies currently hold licenses to the CTP technology. Merck & Co Inc. (NYSE:MRK) holds, and has successfully implemented on the Europe market, a license for four fertility-related proteins, while PROLOR carries a license for "all other human therapeutics of natural or non-natural sequence," according to a recent company presentation.
Merck's success on the European market also bodes well for the development of PROLOR's treatments. One injection of Merck's fertility treatment Elonva replaces seven daily FSH injections, a huge quality-of-life benefit for patients, and similar to the advantages that hGH-CTP would provide for PROLOR's patients. Assuming the swift and positive progress already demonstrated by PROLOR continues, it could only be a matter of time before a larger pharmaceutical company - Teva comes to mind - picks this one up in a buyout transaction.
Meanwhile, the story will continue to spread. "ENDO 2012 represents a great opportunity to share the encouraging data we have reported from our completed Phase II trial of hGH-CTP with leading endocrinologists from North America and around the world," added the CEO in PR comments on Tuesday.
PROLOR could be a nice add on dips.
Disclosure: I am long PBTH.