Savient Pharmaceuticals: Is the End Near?

Savient Pharmaceuticals (NASDAQ: SVNT) recently reported financial results for the first quarter. These results were rather disappointing to both analysts and shareholders, and do not paint a very bright picture for Savient moving forward.

The news at Savient was rather disappointing. In terms of revenue, analyst estimates were $5.65 million. Savient reported first quarter revenue of $4.69 million. Even more concerning about this revenue number is the fact that net sales of Krystexxa Quarter over Quarter actually decreased by 6%. Savient is relying upon Krystexxa for its hopes of future profitability, and having negative revenue growth does not bode well for the future prospects of the company. Savient's net loss came in at $24.4 million or $0.34 per share. The only bright side about Savient's net loss is that it was a decrease from the net loss from the same period in 2012. The decrease in net loss is mostly due to cost reductions as a result of a corporate restructuring.

Some more important numbers include the fact that the cost of goods sold actually rose by 106% to $3.6 million. According to the company: "the increase is primarily due to a $2.1 million charge to reserve Krystexxa finished goods and raw material inventory." The good news for shareholders is that it does not look as though the charge will be permanent going forward, however, for this quarter it made the margins shrink at a time when Savient could desperately use increasing margins. Finally the cash burn rate is a concern at Savient. Savient ended the quarter with $68.8 million in cash and cash equivalents. Now this sounds nice, except for when you compare to the prior quarter. For the prior quarter, Savient had cash and cash equivalents of $96.3 million. This represents a cash burn of $27.5 million. At this rate, Savient will be out of cash before the end of the next three quarters.

The risk of dilution in that scenario would be quite high. Savient is already burdened by an increase in interest associated with debt, due to additional interest due on its 2019 notes. Savient's interest expense increased by 55% to $7.1 million. As an interesting tidbit, this means that total revenue for the quarter at Savient does not even cover their interest expense, clearly something has to give. Furthermore, with Savient looking at a possible Nasdaq delisting, the diminutive nature needed to raise money would be even higher. It becomes harder to dilute stocks that are trading on the OTC, and it seems as though Savient shareholders would want to see more progress before they start forking over more money for the stock. There also becomes the question of who would want the stock? Savient has done a nice job up to this point of painting a rosy picture but with an alarming cash burn rate and decreasing revenue from its main product, it does not seem like any large institutional investors would want to pick up the stock.

The prospects at Savient look rather bleak. It appears as though Savient will have trouble conserving its cash burn rate, and that its revenues will not increase fast enough to bring Savient to profitability. With a pending delisting added to the mix, it seems as though Savient would have a hard time raising money in order to continue operating. Savient's future, unfortunately, looks rather negative.

Titan Pharmaceuticals: Will Braeburn Throw in the Towel

Titan Pharmaceuticals (NASDAQOTC: TTNP) announced on Wednesday an amendment to its agreement with Braeburn Pharmaceuticals. This amendment specifies some very important concepts for Titan's shareholders. The amendment changed the termination clause in the agreement:

"The amendment primarily modifies certain of the agreement's termination provisions by providing Braeburn the right to terminate the license in the event significant additional clinical work or a material change to the product label will be required by the U.S. Food and Drug Administration (FDA) as a condition to approval of the New Drug Application (NDA) or if the NDA is not approved by June 30, 2014."

There are a few important parts of this agreement. The "in the event significant additional clinical work" is important, as Braeburn will be able to opt out if additional work is needed. Unfortunately, the press release does not define 'significant' additional clinical work. However, given Titan's CRL had the following quote:

"
The CRL states that the FDA cannot approve the application in its present form. The FDA has requested additional data supporting the efficacy of Probuphine, including:

• The ability of Probuphine to provide opioid blockade of relevant doses of agonists
• The effect of higher doses of Probuphine, ideally doses more closely approximating the blood plasma levels associated with sublingual doses of buprenorphine of 12 to 16 mg / day
• Human factors testing of the training associated with Probuphine’s insertion and removal

The CRL also included recommendations regarding product labeling and the implementation of the Risk Evaluation and Mitigation Strategy (REMS)."

It looks as though the FDA may look for additional clinical trials if it is going to want to know about the 12 to 16mg/ day dosage point. If Titan has to conduct additional clinical trials, expect for Braeburn to find an excuse to get out of its partnership with Titan.

Furthermore, it is not entirely certain that the label will not change as the press release even says that the CRL also included recommendations regarding product labeling. As you notice above, if the product label changes, Braeburn has the right to abandon ship. This possible change could also provide a scenario for Braeburn to leave.

However, the most important part of Braeburn's amendment, and why I personally believe that Braeburn will abandon the partnership is the part about an NDA being approved by June 30, 2014. Given the current timeline for FDA submissions, the likelihood of the FDA even reviewing the NDA by that time is relatively low. It would depend upon Titan getting a favorable classification for the response, as well as Titan not having to conduct any additional clinical trials. It is unlikely that Titan will be able to draw up its response in time for a possible approval by June 30, 2014 and thus Braeburn's hand will be strengthened. However, in this scenario an interesting possibility exists. If the review is not completed by June 30th Braeburn could possibly renegotiate the terms of the partnership with Titan to be much more favorable to Braeburn, otherwise Braeburn could threaten to leave the partnership and stick Titan with a product for which Titan will have to find a marketing partner. This strategy could work out for Titan in the end, or it could end up horribly for Titan. 

Only time will tell what Braeburn will end up doing about its relationship with Titan. One thing is clear though; Braeburn is looking for a way out if the relationship does not work done. Braeburn has found its ticket out of the relationship, and the question will simply come down to the FDA, Titan, and Braeburn to see if this partnership will last. This amendment reminds me a great deal of what happened to Alexza Pharmaceuticals (NASDAQ: ALXA)  with their previous partnership before finding in my opinion an even better partnership. Overall, this could work out for Titan either way, but for right now it seems to be out of Titan's hands and solely dependent upon what the FDA chooses to require. 

Generex Biotechnology: Why Investors Should Get Out Now!

In the biotech industry, just like with anything else. There are some companies who thrive, and others who fall into the wastebin. Generex is one of the latter. Not all of us end up with a winner like Vertex Pharmaceuticals (VRTX) or Jazz Pharmaceuticals (JAZZ). For some stocks, it is simply time to sell out and accept the losses that they have incurred since inception.

The first stock is a stock that I used to own when I first got into investing, and I sold it a year after that point in time, Generex Biotechnology (GNBT.OB). Generex has been leaking cash for years. Which is truly a shame because their Antigen Express pipeline seems to have quite a bit of quality. I would invest in Antigen, if I ever got the chance to, but not with Generex's management. Antigen as a matter of fact should be its own company by now, according to a statementmade by the company on March 30th, 2011. Generex intended to spin out Antigen Express and issue dividends of Antigen Express shares to current shareholders, that was of course contingent upon shareholders approving a reverse stock split. This split was approved on June 8th, 2011; yet Antigen is still controlled by Generex to this day. Generex for some reason also scrapped the plan for the reverse stock split. Antigen was valued at over $300 million according to Generex. If this asset is worth so much money, why would Generex's market cap be sitting at a mere $17.97 million? Well, first of all what is mentioned in the press release is simply a "leading national valuation firm" estimated the value of Antigen Express to be at over $300 million. Well, this does not truly help to solve the value of Antigen Express, as I could tomorrow open a valuation firm, but that would not make me credible in terms of my valuation. They should have mentioned the name of the company that did this valuation. Now, moving away from the unrealized talk of the spinoff of Antigen Express, let's dive into Generex's financials and see why I believe that Generex could be on the verge of collapse. Generex, according to their recently filed financials lost $5 million last quarter. If you notice, Generex had a negative operating cash flow of $1.045  million. The only reason that they finished cash flow positive for that quarter is the fact that they ended up having $1.45 million in the sale of stock and another $708k in net borrowings. Now, before people say it, I know that many 'development' stage biotech companies are net negative for years while progressing their pipeline (although Oral-lyn is still undergoing Phase III testing, for what is now its fifth year of testing, given that it started North American testing on April 7th, 2008). In that time for Oral-lyn, Generex has announced two phase III trial results, only to discover that they will need more testing. With a dwindling cash supply, it looks as though Antigen's products might not reach the market before bankruptcy. The unrealized potential of Antigen Express is just some more empty talk from Generex.

Some interersting biotechs

Some of my favorite Biotech stocks right now:

1. Antares Pharmaceuticals*, as you can see through http://seekingalpha.com/article/1292491-antares-a-compelling-long-term-investment, I lay out some of the reasons why I personally own this stock as well as some compelling reasons that I believe that other people should own this stock.

2. Titan Pharmaceuticals*- This company recently received a positive opinion from an FDA advisory panel, and received a massive boost in share-price as a result. I would look for it to "fill the gap" between where it was pre-panel and post-panel, before the PDUFA date. http://seekingalpha.com/article/1296401-why-titan-pharmaceuticals-is-currently-undervalued

3. Looking for a little bit more long-term: An interesting buy at current price levels is Dynavax Pharmaceuticals (DVAX). The interesting part is that you are banking that they are not going to have to run  any more trials, as that would hurt the share-price substantially. However, not having to run more trials would allow for a short-turn around time on a response to the CRL, and look for DVAX's meeting with the FDA to end up being positive. Remember that the FDA was the one who asked them to increase the age group, a main concern of the committee. If DVAX refiles relatively quickly we could see a run-up start all over again and subsequently, see huge gains on the stock.

4. Another more long-term idea is to invest in Amarin. Now I know what you all are saying, Amarin, we have been down that road before. However, I believe that the commercial potential of Vascepa, is huge. Also the Anchor indication coming up could help to boost the patient population. I would own this stock over the long-term.

 Note: stocks with astricks (*) indicate stocks that I currently own. Note: if you would like for me to go more in-depth in any of my stocks please post a comment and I will do my best to go more in-depth.

This post is meant for entertainment and informational purposes only. This does not constitute investment advice, or an offer to buy or sell securities. Conduct your own due diligence before investing. I have not been compensated for writing this post by any source except amaxstockideas.blogspot.com. Happy investing.

Generex Is anything left for this once interesting biotech?

Generex Pharmaceuticals (GNBT)- Has for years been promising, and promising, and promising... yet nothing has been delivered. Generex has made promise time and time again to help increase the value of the company, for example promising to divest its Antigen Express subsidiary if shareholders would just agree to a reverse stock split. Well, shareholders agreed, and still nothing. Generex promised to have Oral-lyn Phase III trials designed, and still Oral-lyn appears to be sitting dead on the shelf, a multi-million dollar view-piece  Collecting dust, and collecting past memories, that is Oral-lyn. Generex has still not cleared up its situation in India, and has still not designed a Phase III trial for AE-37, the one rather promising drug in Generex's pipeline.

It is truly sad though, this company had such great potential, its Metformin gum would have revolutionized the marketplace, but that project was mysteriously dropped by the company. The system surrounding Oral-Lyn was supposed to help revolutionize the way that Americans perceive diseases and the way in which we treat diseases. Yet, the technology platform is rotting away seemingly, while Generex is burning cash at an alarming rate. At this rate, one must begin to wonder if it would be best for Generex to just go bankrupt, and thus allow for shareholders to buy Antigen Express, and unlock the true value of the company. This company has a chance, but the shareholders must quickly choose, management or the company?

Note: the views expressed in the article are solely those of the author. This article is meant solely for informational purposes, and is not meant to be investment advice. The author has received no compensation for writing this article (other than from amaxstockideas.blogspot.com). You invest at your own risk, complete your own due diligence before investing in a particular stock. This article cannot be considered an offer to buy or sell securities. 

Dendreon Opportunity?

Just today Dendreon Corporation (DNDN) announced "corporate restructuring" and that it would cut approximately 500 jobs. This comes on the back of disappointing sales for its Provenge treatment for Prostate Cancer, and an over 60 percent drop in its stock price on the day of the sales. Dendreon has spent a lot of money to open yet another manufacturing plant, and it seems to have atleast initially way over-anticipated the demand of Provenge. DNDN last quarter announced Provenge sales of just 49.6 million dollars, which is substantially lower than analyst estimates. DNDN also withdrew its previous revenue guidance and said that it expects moderate quarter over quarter growth in sales.

Previously DNDN had predictions of 350 to 400 million dollars in sales for the fiscal year, however that has now been withdrawn by the company.

The main problem that is facing DNDN is getting reimbursed by insurance companies.Provenge's price tag is a whopping 93 thousand dollars, and insurance companies seem to have a hard time justifying the cost in the face of how many more months it adds to a patient's life.

For the fourth quarter DNDN reported a net loss of 114.6 million dollars or 79 cents per share. DNDN is quickly bleeding cash and will need for Provenge sales to increase to have any hope.

The next question really becomes does DNDN have anything else in its pipeline that might be worth investing in? The answer is yes.... kind of. DNDN has a few different drug candidates listed under its pipeline, one of the more promising treatments appears to be a treatment called Sipuleucel-T, which is in Phase II and III trials in Hormone sensitive prostate cancer, as well as in metastatic Prostate Cancer. However, Cancer drug trials take a very long time to run by their very nature, so I am not sure how far away this drug is from the market, but I would say atleast a few years if it can even garner approval.

DNDN also has some other compounds which are in various stages of clinical trials but for now they seem to be reliant on Provenge for their future success.

On DNDN I would say invest on what you can see. I would estimate that the sales numbers although initially slumped, will probably pick up later, so the company could still be successful later. I believe that this company is very reliant on Provenge.

Its a risky bet but it might be worth picking up a few shares and being prepared for their next earnings and seeing if you can make some quick money on this one. DNDN's other drugs appear to be years out, so for right now Provenge seems to be the drug that is going to make or break this company.

Disclosure: I do not own a position in DNDN, and do not plan on opening one for the next week at least.


To view all drugs in their pipeline, here is a link to DNDN's home website:
www.Dendreon.com

To get a quick rundown of the earnings report:
http://www.thestreet.com/story/11208772/1/dendreon-earnings-provenge-whiffs-badly.html

Hope you enjoyed the post, please leave a comment!

Amarin Pharmaceuticals a bust or a must?

Recently Amarin Pharmaceuticals has attracted a huge amount of attention about its triglyceride lowering drug AMR-101. The results for the studies speak for themselves, huge improvements over the standard of care and a seemingly best in class status. AMRN also has the potential to not just market the product to people with high triglycerides, but also in the medium level as well, which could be a potential gold mine, remember Loveza was never able to attain the ability to market to the medium level, which would open up a significantly bigger market for the drug. AMRN also says that they might investigate the drug for other cardiovascular indications, however right now it is important to focus on the upcoming events for the company.

After the Anchor results, the stock shot up to a high of $19.87. It is now around 11 dollars. The real question is is it time to buy, or do you hold off on this one until later? Well this is a complex situation.

The drug works remarkably well, however there are some serious concerns about the drug's patent protection. The real issue is: Is the drug able to attain sufficient patent protection that would withstand the challenge of a generic drug maker. Recently, the company was denied a patent, which seems to be a big fork in the road. Fortunately, the company does have the ability to appeal the denial and I believe will ultimately succeed in its attempt to patent this product. The company does have major concerns however and this seems to be a steep concern for investors, as very little or no patent protection can mean that getting the drug approved will help generic drug makers a lot more than shareholders.

Amarin is expected to file an NDA in September for approval in patients with high triglycerides, this would rely on the results from the Marine study. Last I heard, the company was going to include the Anchor results in order to try to get a possible label expansion from the FDA. However, I have also heard that there are going to have to be much more costly and larger trials run in order for the company to obtain approval in medium triglycerides.

Based on the results so far, the question for the company appears to be when and if this trial is going to be run. The company is still bleeding cash on its balance sheet, although it seems to be sitting on a mountain of cash.

My conclusion: Amarin on Marine alone should become profitable, and the profits will allow for it to be able to run trials in medium triglycerides, however that is looking pretty far down the road. Maybe, Amarin starts running the trials now...

Amarin definitely has a best in class drug, and some doctors seeing the results of the Anchor study should probably allow patients to use AMR-101 off label for the treatment of medium triglycerides.

I believe that the company will ultimately prevail in its patent issues, and that this is a great medium to long term buy for any investor. This drug has the chance to change the life of patients, I also believe that the patent issue seems to be the only thing that is holding a competitor from swooping in and buying out Amarin, so I would expect that if this patent issue is resolved relatively quickly, that we might see some potential suitors come knocking at the door.

The results of the trial speak for themselves:

Link to the Anchor results, this one is the one in Medium Triglycerides: http://www.nasdaq.com/aspx/company-news-story.aspx?storyid=201104180208rttraderusequity_0060&title=amarin-announces-positive-top-line-results-from-anchor-trial-for-amr101

Link to the Marine results, this one is the one in High Triglycerides, serving as the basis for the upcoming NDA: http://investor.amarincorp.com/releasedetail.cfm?ReleaseID=533361

Amarin could be entering a huge market with a great drug, and a group of executives with experience in the area, this is definitely one to keep on your radar, and possibly a medium to long term buy. 

Biosante Pharmaceuticals Analysis

BPAX is one of my top recommendations. Biosante is a pharmaceutical company whose principal product is a gel, which is being tested to improve the sexual desire of women who have HSDD. This gel is currently in Phase III studies, with the efficacy end of study results due out before year end. The safety study seems to be going well as the data monitoring committee has allowed for the study to continue. I believe that results from the safety study are expected sometime in the early half of 2012 with an NDA being filed shortly after and the product ultimately hitting the market in 2013. This drug could be huge for the company, Pfizer and other pharmaceutical giants have tried to get to this market.... and failed.

Along with libigel the company has many other near term revenue generating prospects. The main one being that the Bio-T Gel which is being licensed from BPAX to Teva has an upcoming PDUFA date of November 14th. Why is this important? This is important for two reasons, as pursuant to the agreement I believe that BPAX will receive a milestone if the gel is indeed approved, and could receive royalties on any revenues from the product. With a pharmaceutical company like Teva marketing the gel, BPAX could get some nice and solid near term revenues.

Another noteworthy point is the fact that Biosante has already had one product approved, so they should theoretically know the process that they will have to face in order to get this product approved by the FDA. The product that has already been cleared by the FDA is Elestrin, which was licensed by the company to Azur pharmaceuticals. The company amended the agreement and recieved I believe around 3.16 million dollars for the product. They could recieve over 140 million dollars more if different sales milestones are met, however according to the CEO of Biosante this is unfortunately unlikely.

Another product in the Biosante Pharmaceuticals pipeline is the pill-plus, which is currently licensed to Pantahari Biosciences. The pill plus is in various Phase II/III tests around the world. This is significant because again if the product is approved it could allow for Biosante Pharmaceuticals to have a solid revenue stream. The Pill-Plus has already passed a Phase II clinical trial.

One of the more promising drugs in the Biosante pipeline is the melanoma drug, which Biosante Pharmaceuticals licensed to the Hussman foundation. This deal is great for Biosante, because despite the small upfront payment, Biosante has significantly derisked the program. Biosante is eligible for up to 39 million dollars in milestones, and would recieve royalties on any commercial sales of the product.

Finally, the last product which I am going to focus on is the Pancreatic Cancer vaccine which is currently licensed to Aduro Biotechnology. This vaccine is headed for Phase II trials in the end of 2011 and in my opinion has so far been rather promising.

In conclusion, I believe that Biosante Pharmaceuticals is a fantastic investment opportunity and should not be overlooked, I myself own BPAX stock and am looking forward to the future of the company. This is a company that has a very robust and promising pipeline, and the money to get through the Libigel Phase III and to the NDA according to the CEO, which helps to significantly reduce the risk of further dilution of the shares. BPAX should experience a run up into the Elestrin PDUFA date, and should also experience a pop on the news of the Libigel Phase III trials. These trials should be positive, given how positive the other Phase II trial for Libigel was, which surpassed any expectations that I had for this company. In conclusion, BPAX is a great company with a robust pipeline, and a most own for any biotech investor!