NuPathe Facts On A Very Undervalued Play

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NuPathe is a specialty pharmaceutical company that focuses on the development and commercialization of branded therapeutics for diseases of the central nervous system, including neurological and psychiatric disorders.

About the Migraine Patch (NP101 or Zelrix)

NP101 is an active, single-use, transdermal patch in development for the treatment of migraine. If approved, it will be the first transdermal patch for the treatment of migraine. The patch actively delivers sumatriptan, the most widely prescribed migraine medication. In three clinical trials involving more than 10,000 applications, NP101 offered patients fast onset and sustained relief of debilitating migraine symptoms including headache pain and migraine-related nausea (MRN). Because NP101 delivers sumatriptan transdermally, it may be an attractive treatment option for many frequent MRN sufferers and those patients who experience gastroparesis, a slowing of gastric absorption. The patch utilizes SmartRelief™, NuPathe's proprietary transdermal delivery technology that allows the rapid yet tightly controlled transport of medication through the skin using a process called iontophoresis. As a result, in NP101 clinical trials there was a low incidence of triptan sensations that include chest tightness, flushing and feelings of pressure and numbness.

About Migraine and Migraine-Related Nausea

Migraine is a neurological disorder that affects approximately 30 million adults in the U.S. In addition to a headache pain, most migraine patients suffer from one or more significant gastrointestinal problems, including nausea, vomiting, and gastroparesis. Approximately eight million diagnosed migraine sufferers experience MRN in greater than fifty percent of their migraines. These frequent-MRN sufferers are less likely to achieve headache relief with oral triptans and are less satisfied with their current migraine medications. They experience more medication-related interference in several aspects of life, including their ability to work and spend time with family. In addition, these patients generate increased direct medical costs as a result of their five-fold increase in emergency room and urgent care visits and eight-fold increase in overnight hospital stay costs. Some migraine patients also experience gastroparesis, which may affect a patient's response to oral medications.

FDA requests additional information regarding Nupathe's Migraine Patch in Complete Response Letter

NuPathe Inc. (NASDAQ: PATH) today announced that it has received a Complete Response Letter (NYSE:CRL) from the U.S. Food & Drug Administration (FDA) regarding the New Drug Application (NDA) for its migraine patch (NP101 or Zelrix). A CRL is issued by the FDA's Center for Drug Evaluation and Research when the review of an NDA is completed and questions remain that preclude the FDA from approving the NDA at the time.

In the CRL, the Agency acknowledged that NuPathe established the efficacy of the migraine patch in the overall migraine population. The CRL primarily contained chemistry, manufacturing and safety questions, which the Company believes it has, or shortly will have, sufficient data to address. The Company may conduct additional Phase I and/or non-clinical studies to address other questions. NuPathe will request an End-of-Review meeting with the Agency to discuss the CRL and the Company's approach to resolving the outstanding issues.

NuPathe Response to Complete Response Letter

At the time of the PDUFA on Aug. 30, 2011, NuPathe had not completed its second efficacy and safety trial.

On Oct. 3, 2011 the trial was complete. Here are the results from the press release.

NuPathe Inc. (NASDAQ: ) today announced positive top-line results from NP101-009, its second 12-month, repeat use safety trial for its migraine patch (NP101 or Zelrix).

NP101-009 was designed to assess the long-term safety of the migraine patch. A total of 479 patients were enrolled and applied at least one patch. Consistent with the findings from previous studies, the incidence of adverse events known as triptan sensations, which can include chest tightness, flushing and feelings of pressure and numbness, was very low, with only four patients (0.8 percent) reporting a triptan sensation over the course of the 12-month trial.

"We now have treated more than 800 patients who applied greater than 10,000 patches in our Phase III clinical program," commented Mark Pierce, MD, Ph.D., chief scientific officer of NuPathe. "Our clinical data have consistently shown a very low rate -- 1.4 percent in fact -- of triptan sensations across patients who have used our patch to treat their migraine."

The most common adverse events in the NP101-009 study occurred at the patch application site and included: application site pain (18.6 percent of patients), application site itching (14.0 percent) and application site reaction (6.1 percent). During the 12-month trial, 13.4 percent of patients withdrew from the study due to adverse events, primarily related to the patch application site.

"Based on the extensive clinical data from our entire Phase III clinical program, we believe that our patch will provide a valuable new treatment option that is particularly well-suited for the millions of migraine patients who suffer from debilitating migraine-related nausea along with their headache pain," said Jane Hollingsworth, chief executive officer of NuPathe."

So what is Zelrix worth?

The current O/S should be around 28 million after the private placement. The Zelrix patch will cost around $200 a month. So that would be $2400 per year. Knowing that there are 30 million migraine sufferers out there, capturing around 200,000 (being conservative) of these patients should not be a problem. That would be $480 million in revenue.

The current market cap is close to $98 million with the price per share of $3.50. I will give the revs a 25% haircut, giving a value of close to $10.00 per share. Based on all this i will give it a PPS target of $8.50 on approval ( conservative).


Zelrix is less invasive, more tolerable and effective than other alternatives. Physicians will realize this and will prescribe it accordingly to their migraineur patients.

Also, it is one of the most undervalued PDUFA out there at the moment. Nupathe is under the radar but not for long. The company currently has a PDUFA date Jan. 17, 2013. (Prescription Drug User Fee Act, the acronym PDUFA, is when the FDA will either decide to approve or deny a drug to come to market and be sold by the company under a physician's prescription)

Disclosure: I am long PATH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.