PropThink: Titan Files NDA on Probuphine; Partner Waits
(Thomson Reuters ONE) -
By Jason Napodano, CFA
Monday morning, Titan Pharmaceuticals (OTC:TTNP) announced it had filed a New
Drug Application (NDA) to the U.S. FDA on Probuphine for
the maintenance treatment of opioid dependence in adults patients (Press
Release). The NDA has been submitted under Section 505(b)(2) of the Food, Drug
and Cosmetic Act and references the approved sublingual tablet formulations of
buprenorphine. Titan has requested a Priority Review for the application. If
granted, the Priority Review would accelerate the FDA's decision on Probuphine
from the standard ten month review for a 505(b)(2) application, to six months.
Investors should hear back from the FDA on the status of the application in 60
days, or by December 28, 2012.
Background Information
Buprenorphine is a synthetic derivative of opium, chemically similar to both
morphine and codeine, but has stimulatory rather than depressant effects.
Buprenorphine is 25-50X more potent than morphine and is sometimes used
recreationally by insufflations (crushing and inhaling the
powder). Buprenorphine is a Schedule III controlled substance under the United
Nations' Convention on Psychotropic Substances.
Buprenorphine is commonly used to treat addiction to heroin, and has proven
superior in its efficacy and convenience to methadone. Withdrawal from
buprenorphine after short-term use is generally far milder than other potent
opioids, but can have a longer duration of abuse. The drug has a pharmacologic
ceiling effect, which provides an increased safety margin when compared to
methadone. As a result, the drug is now generally recognized as the gold
standard for the treatment of opioid addiction. There are an estimated 3.7
million people addicted to opioids in the U.S., over 80% of which are
prescription drugs.
The product was first marketed in 1980 by British firm Reckitt & Colman as an
analgesic. In October 2002, the U.S. FDA approved Subutex as high-dose (2 mg &
8 mg) sublingual pill preparations and Suboxone, a novel formulation of
buprenorphine and naloxone, to increase the deterrence of abuse through
intravenous injection. Naloxone is an opioid antagonist that blocks the high or
euphoric effects for opioids such as heroine that leads to withdrawal
symptoms. As a result, Suboxone is now predominantly used for this purpose.
Suboxone (buprenorphine) Use Has Soared In A Large Market
In October 2009, the FDA approved a generic preparation of sublingual
buprenorphine. Demand was so high that pharmacies began to run out of supply and
Roxane Labs, the first generic filer, was unable to meet demand. Additional
supply is now online. To counter the generic pressure, Reckitt Benckiser began
marketing a Suboxone Film, first approved in August 2010. In September
18, 2012, Reckitt notified the FDA that it was voluntarily discontinuing
supply of Suboxone tablets due to increasing concern with pediatric exposure;
but we all know that Reckitt clearly had ulterior motives for its decision.
Between Suboxone tablets and Suboxone sublingual film, Reckitt took in over $1.2
billion in sales from the franchise in 2011.
Titan Pharmaceuticals developed Probuphine, a novel, subcutaneous implantable
formulation of buprenorphine designed using its ProNeura technology. Probuphine
delivers six months of buprenorphine without risk of accidental pediatric
exposure. Patients undergo a simple 10 minute procedure to receive the
Probuphine implant and the buprenorphine is slowly released in continuous
fashion over the next six months. Besides the obvious zero risk of accidental
exposure or potential for abuse, we see Probuphine as a meaningful improvement
in compliance. Heroin addicts and their treating physicians know Probuphine is
always working to curb the addictive craze.
Titan completed two phase III trials and two long-term safety analyses with
Probuphine. Data from the first phase III trial was published in JAMA (2010;
304(14):1576-1583) in October 2010. Various posters of the data have been
presented at the American College of Neuropsychopharmacology in December 2009
(ACNP Poster-1), the International Society of Addiction Medicine in September
2011 (ISAM Poster-2), and the American Society of Addiction Medicine in April
2012 (ASAM Poster-3).
We view the data as impressive. Probuphine works, and the concept is ideally
suited for curbing addictive behavior without risk of accidental exposure or
misuse / abuse. We're bullish on the prospects for the drug. We base our opinion
on the strong clinical data, the thoughtful and rational design for the product,
and various conversations we've had with management and lead investigators from
the confirmatory phase III trial. In August 2011, Titan hosted a call with Dr.
Walter Ling, M.D., Professor of Psychiatry and Director, Integrated Substance
Abuse Programs at the David Geffen School of Medicine at UCLA and Dr. Richard N.
Rosenthal, M.D., Chairman of Psychiatry at St. Luke's-Roosevelt Hospital Center,
a teaching hospital of Columbia University, past president of the American
Academy of Addiction Psychiatry. Both doctors expressed their enthusiasm for
Probuphine and why they believe it will see meaningful commercial uptake.
As noted above, in the U.S. there are an estimated 3.7 million individuals
addicted to opioids. Currently, Suboxone does around 500,000 prescriptions
annually. We model that Probuphine can capture 20% of these patients at a cost
of around $3,000 per course of treatment (average of 1.4 implants per patients
taken from clinical database). Therefore, in the U.S. alone, Probuphine is a
$200 million product.
Undisclosed Partner Waits
On September 14, 2012, Titan announced it had entered into a stock purchase and
option agreement with another pharmaceutical company for the potential license
of Probuphine. As part of the transaction, Titan sold 3.4 million shares of
common stock to the potential partner at a price of $1.25 per share, netting
proceeds to Titan of $4.25 million.
Given that Titan's stock was trading at $0.72 before the announcement, we
interpret the transaction as roughly $2.5 million in a straight stock purchase
transaction and $1.75 million in an exclusivity option for talks on Probuphine.
At the time of the deal, the exclusivity option period for negotiating a
licensing deal was set to expire on October 31, 2012. However, given that Titan
just filed the NDA today, both parties have agreed to extend the period until
December 31, 2012. This makes sense, considering the 60 day window to accept the
NDA and grant priority review should occur on or before December 28, 2012.
With peak U.S. sales of $200 million (not including another potential $100
million in Europe), we think Titan and this yet undisclosed partner should be
able to come to terms in late December 2012. In the past, we have written that
we believe Titan should be able to obtain upfront cash in the area of $15
million, a similar approval milestone in mid-2013, backend milestone totaling
$100 million, and a ~20% royalty on sales. Under this scenario, we believe Titan
is an attractive investment at today's price. Titan's stock could be well above
$2.00 per share with the granting of Priority Review, a licensing deal, and the
market's growing confidence in approval.
Read this article in its original format by clicking here.
About PropThink
PropThink is an intelligence service that delivers long and short trading ideas
to investors in the healthcare and life sciences sectors. Our focus is on
identifying and analyzing technically-complicated companies and equities that
are grossly over or under-valued. We offer daily market coverage, weekly feature
stories, and a newsletter to investors who subscribe on PropThink.com. To learn
more, follow us on Twitter or visit us at http://www.propthink.com.
Disclaimer:
You should assume that as of the publication date of any report or letter,
PropThink, LLC and persons or entities with whom it has relation ships
(collectively referred to as "PropThink") has a position in all stocks (and/or
options of the stock) covered herein that is consistent with the position set
forth in our research report. Following publication of any report or
letter, PropThink intends to continue transacting in the securities covered
herein, and we may be long, short, or neutral at any time hereafter regardless
of our initial recommendation. To the best of our knowledge and belief, all
information contained herein is accurate and reliable, and has been obtained
from public sources we believe to be accurate and reliable, and not from company
insiders or persons who have a relationship with company insiders. PropThink was
not compensated to publish this article. Our full disclaimer is available
at http://www.propthink.com/disclaimer.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: PropThink via Thomson Reuters ONE
[HUG#1653228]
Unternehmensinformation / Kurzprofil:
Datum: 29.10.2012 - 17:17 Uhr
Sprache: Deutsch
News-ID 197292
Anzahl Zeichen: 10201
contact information:
Town:
New York
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 176 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"PropThink: Titan Files NDA on Probuphine; Partner Waits"
steht unter der journalistisch-redaktionellen Verantwortung von
PropThink (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
