I really dislike having to write a rebuttal to the misanalysis of Adam F. It takes an inordinate amount of time and effort and is never really worth it for me personally. Adam F is a so called analyst who made his reputation betting against small biotech companies working on cancer drugs. Adam and I go all the way back to 2012, when I first started trading. Adam and I disagreed on the share price movement of several biotech companies, in short I was right and he was wrong. This was the case with QCOR below $20, MNKD below $2, and this year when RMTI was below $4.
The most irritating thing about Adam is not his emotional immaturity or his intellectual inferiority in regards to medicine but rather his inability to admit that he is wrong. Today is another example of his disassociation from reality and proof that cognitive dissonance is alive and well in the weakest of minds on Wall Street. I am sure this rebuttal will afford me a wonderful concoction of curse words, combined in a unique and elegant manner from the mentally challenged analyst.
"Antares Pharma, Inc. (ATRS) today announced the approval of OTREXUP™ (methotrexate) injection by the U.S. Food and Drug Administration (FDA). OTREXUP™ is the first FDA approved subcutaneous (NYSE:SC) methotrexate (NYSE:MTX) for once weekly self-administration with an easy-to-use, single dose, disposable auto injector. OTREXUP™ is indicated for adults with severe active rheumatoid arthritis (NYSE:RA) who have had an insufficient therapeutic response to or are intolerant of an adequate trial of first line therapy including full dose non-steroidal anti-inflammatory agents (NSAIDs), or children with active polyarticular juvenile idiopathic arthritis (pJIA). The FDA also approved adult use of OTREXUP™ for symptomatic control of severe recalcitrant, disabling psoriasis that is not adequately responsive to other forms of therapy" finance.yahoo.com/news/otrexup-methotrexate-injection-approved-fda-130000682.html
Adam predicted that Antares will not gain approval for OTREXUP and since that prediction obviously did not come true, he took to the internet to manipulate the share price by any means possible. In his latest piece Adam titles his post with "Antares' Otrexup, Approval was easy, selling drug will be hard".
Adam makes a few points in his "article" and does a great job at making sure that they are all completely invalid. Quoted from Adams latest failure, of what we might consider, a reputable analysis:
· "selling the injectable formulation of methotrexate will be a lot more difficult"
· "Despite its advantages, injectable methotrexate is rarely prescribed, mainly because it requires weekly visits to the doctor's office."
· "If you believe Antares' sales pitch- the convenience of Otrexup (patients can self-inject at home) will convince doctors to increase their use of injectable methotrexate for treating rheumatoid arthritis patients."
· "Don't expect Otrexup sales to roar out of the starting gate. This is a me-too drug, perhaps a bit more convenient. Rheumatologists and insurance companies aren't likely to embrace Otrexup."
Can we get a round of applause for yet another manipulative article that leaves out inconvenient things like facts? Perhaps Adam doesn't really know anything about medicine because he majored in political science and somehow believes that it is relevant to medicine. Since he has no basis in medicine, how about I take some time to discuss some relevant facts and tear his misanalysis apart.
Rheumatoid arthritis is an autoimmune condition in which the body has an abnormal response to its own tissue. This process leads to inflammation that causes damage to joints and can affect organs. Approximately 1.5 million people are diagnosed with RA in the US. Approximately 70% of the patients with RA are treated with an oral regiment of methotrexate. In 2012, approximately six million prescriptions were written for MTX for the treatment of RA, children with Polyarticular idiopathic arthritis and adult psoriasis.
Otrexup has a higher bioavailability of the drug via subcutaneous injection and reduces the side effects associated with oral MTX usage. In the US Otrexup will be the first subcutaneous injection of MTX formulation. The current injections of MTX are for Intramuscular use only. Obviously this fact was conveniently left out of Adam F's article. The pain from an IM injection is far greater than a subcutaneous infection and you could accidentally hit a nerve causing chronic pain. The risk of damaging an underlying nerve is one of the main reasons MTX IM shots are given in doctor's office and not at home.
For a visual of the different routes of administration:
As you can clearly see, subcutaneous injections are not only more convenient but also exponentially safer for self-administration. But the convenience of self-administration is not the true genius of Otrexup.
MTX inhibits cell growth and oral administration of the drug causes moderate to severe damage to the gastrointestinal tract. This special property of the drug, inhibiting cell growth, is like a double edged sword for patients and clinicians alike. The cells in patients mouth, esophagus, stomach and intestines are constantly regenerating themselves due to the acidity of the environment and multiple other factors; MTX inhibits this physiological activity. The use of MTX can lead to formations of ulcers and places the patient at risk for GI bleeds, Mallory Weiss tears and a myriad of other multiple medical problems that could become deadly. Otrexup allows for the clinical benefits of MTX without the side effects associated with oral administration.
· Higher bioavailability of the drug into the blood stream in comparison to oral formulation of the drug.
· Convenient for home use due to subcutaneous administration.
· Prevents side effects associated with oral use such as ulcers, GI bleeds, etc.
· Reduces costs associated with treatment of RA because it reduces the side effects associated with oral use.
· Subcutaneous injections are easy to use and a lot less painful in comparison to IM shots.
I've been asked several questions about the prospects of this drug in regards to the insurance companies. Lets break it down in a plain a simple manner. Otrexup allows for the clinical benefits that a patient with RA needs without the associate side effects of ulcers, GI bleeds, etc. The main reason patients are on MTX right now is because there is no "better" alternative. Otrexup subcutaneous shots once per week may seem like a expensive alternative in regards to oral therapy. However; if you look at the costs, associated with GI problems that are caused by MTX, it is quite clear that in the long run patients and insurance companies save money.
So lets think about this for a second with our amazing super power called "common sense". A drug that provides a superior clinical benefit along with prevention of major adverse side effects, reduction of health care costs down the road, etc. will it be covered by insurance? hmmmm
In conclusion, Adam F has yet again posted a shoddy analysis that has no basis in reality and is obvious manipulation. Adam conveniently left out all the clinical benefits of Otrexup and made it seem like it was just some novel expensive way of administrating a common drug. Otrexup is set to become the standard of care for RA treatment and due to the cost savings associated with the reduction of side effects, insurance companies will prefer this over oral use. Please do your own due diligence and make an informed decision about your investment.
Disclosure: I am long ATRS.
Additional disclosure: I am long ATRS, I held through the PDUFA and have no intention of selling in the next 72 hours.