Welcome!

.NET Authors: Elizabeth White, Pat Romanski, ChandraShekar Dattatreya, Trevor Parsons, Peter Silva

News Feed Item

Pozen: An Undervalued Investment and Catalyst Trade Opportunity

LOS ANGELES, CA -- (Marketwire) -- 02/11/13 -- Small cap biopharmas that make for good long term investments are hard to find. Most small cap biopharmas burn a ton of cash while developing treatments for a variety of ailments and rare diseases.

Today, we focus on Pozen (NASDAQ: POZN) which we feel may present a good longer term speculative investment as well as a good trade with near term catalysts.

Pozen reminds us of another company we came across in 2011, Antares Pharma Inc., which produced an 80% gain in 14 months.

Antares is not a typical biotech that develops drugs to treat rare diseases such as the ones mentioned above. Rather, the company aims to take existing treatments and make them better via subcutaneous self-injections. When we first covered Antares, the price was around $2.20 a share. Within one year, the stock nearly tripled, hitting a 52 week high of $5.58, before settling back to the high $3 range, where it trades today.

Like Antares, Pozen takes existing drugs and seeks to make them safer and better -- more tolerable. Today, we will look at the management, pipeline, upcoming catalysts, partnership potential, and noteworthy financial items for Pozen.

Management:

One reason Pozen reminds us of Antares is because of the strong management with impressive backgrounds.

John R. Plachetka, Pharm.D., is President, Chief Executive Officer, and Chairman of the Board of Directors of Pozen. Prior to founding the company in 1996, Dr. Plachetka has held many high level positions in the pharmaceutical industry. Most notably, he had a nine-year career at Glaxo Inc. where Dr. Plachetka held various executive positions including Director of Cardiovascular Clinical Research and led the U.S. development program for Imitrex®, Trandate®, and a thromboxane antagonist.

Mr. Plachetka is the firm's biggest shareholder holding over two million shares. He is also responsible for bringing Liz Cermak on as the firm's Executive Vice President and Chief Commercial Officer. A former Worldwide Vice President for Johnson & Johnson, Liz has served in a variety of senior leadership roles across the pharmaceutical, consumer products, and health management businesses. She has over 25 years' experience in the healthcare industry.

The CEO's heavy ownership stake is one of the reasons why we believe the management team is extra focused with added incentives to perform well for its investors. The scenario arguably communicates a direct sense of personal accountability towards building shareholder value for investors in the company. The more that CEO is able to create shareholder value, the more he will ensure his own compensation and benefits.

The value of the management's approach has been proven with its success in gaining FDA approval of two self-invented products. One of these products is Treximet, developed with pharmaceutical giant GlaxoSmithKline in June 2003 for the acute treatment of migraine attacks in adults.

In what appears to be a very smart move, Pozen sold most of the future royalty and milestone payments covering Treximet sales in the United States to a financial investor for $75 million in November, 2011. On the surface, this move did not appear to carry much weight, but upon closer inspection we noticed that the company is piggybacking the product by retaining exclusive U.S. rights to develop and market a lower dose: sumatriptan and naproxen combination (MT400). This is the same combination used in Treximet. By making the move, the company raised tens of millions while keeping virtually the same product in development.

A pipeline chart later in this article shows the MT 400 drug in Phase III development. As a result of the Treximet decision, one year later the company remains shareholder friendly having achieved a hefty cash position while avoiding dilution.

As of the end of Q3, 2012, Pozen had approximately $92 million in cash and short term investments. In contrast, the dilution to raise cash was one annoyance we had with an otherwise capable management team at Antares. While it may ultimately be the best course of action for them moving forward, when they raised money last year, it left many investors feeling like it was unnecessary at the time.

Upcoming Catalyst:

Pozen plans on filing an NDA in April for its first PA product PA32540, which is a combination of 325 mg aspirin and 40 mg time-released omeprazole, better known as Prilosec, originally created by AstraZeneca.

From the company's website, we read;

"Pozen's active PA product portfolio is focused on designing cost-effective, integrated aspirin therapies that enable the full power of aspirin by reducing its potential gastrointestinal (GI) damage. The PA product portfolio has the potential to benefit millions of Americans who use daily aspirin to treat cardiovascular disease, osteoarthritis, and other diseases."

PA32540 is designed to be a GI-safer form of aspirin to be administered orally once a day, at a cost of 1 dollar per day. PA32540 prevents secondary cardiovascular disease in patients at risk for aspirin-associated gastric ulcers.

Last week, the company announced the combined results of two Phase III studies of PA32540:

"According to the studies, in the post-hoc analysis of subjects with a history of transient ischemic attack (TIA) or stroke, long-term (6 months) treatment with PA32540, compared to EC-ASA (325 mg), was associated with a significantly reduced rate of endoscopic gastroduodenal ulcers (2.0% vs. 12.4% respectively; p=0.005), and study discontinuation due to adverse pre-specified upper GI events (0% vs. 8.0% respectively; p=0.006). The incidence of adjudicated major adverse cardiac events was similar for PA32540 (2.9%) and EC-ASA (325 mg) (4.4%)."

Mark J. Alberts, MD, UT Southwestern Medical Center, Dallas, Texas remarked:

"Discontinuation of aspirin therapy is often due to the adverse GI effects of aspirin. In these pivotal studies, PA32540 was associated with a significantly lower rate of treatment discontinuation than aspirin alone. Patient adherence to aspirin therapy saves lives, as aspirin discontinuation increases the likelihood of potential adverse cardiovascular and cerebrovascular events."

In an article written by analyst Jason Napodano, he notes:

"Amazon.com sells a 500 tablet bottle of 325 mg aspirin for $11.00, or 2.2 cents per day. One can also buy 42 20 mg tablets of OTC Prilosec (omeprazole) for $23.95, or around 57 cents per pill. To re-create Pozen's PA-325/40, a patient would spend approximately $1.16 per day (taking two Prilosec pills plus an aspirin)."

The above clearly demonstrates why it would be beneficial to choose Pozen's drug over taking aspirin and Prilosec separately -- it would cost less at 1 dollar a day for a patient to buy PA32540 versus buying both drugs separately for $1.16. Additionally, PA32540 is time released and contains a dose specific solution in one pill where patients need not to worry about mixing both medications to get the desired result.

Partnership Potential:

The above referenced article goes on further to note that the PA platform might be worth as much as $400M in sales per year globally, with the company receiving at least a $30M upfront payment from any potential partner. With an NDA filing expected in April the company's desire to secure a partner before the filing, we would expect that Pozen's stock price may see an increase in the short term.

A partnership could spark the stock price, depending on the details of the transaction. Generally, it shows that the development of a drug will be expedited and the potential is going to be greater because of more power and resources behind it. Last year, Sunesis Pharmaceuticals gained 15% on a day when it announced a partnership with Royalty Pharma. Royalty Pharma agreed to pay Sunesis $25 million if the company is successful developing its lead product candidate Vosaroxin, which is an anticancer quinolone derivative class of compounds that have never used to attempt to treat cancer. In the time since, Sunesis has seen a stock price increase of well over 100% from $2.87 to $6.18.

Pozen is already partnered with such pharma giants as GlaxoSmithKline, Johnson & Johnson, and AstraZeneca. This tells us Pozen's management has experience with gaining partnership deals with large pharmas.

Pipeline:

The graphic at Pozen's website shows the rest of Pozen's marketed and pipelined solutions. It is worth noting that the company has other solutions that will also see NDA filings within the next year.

Financials:

Pozen was profitable for the first two quarters of 2012, before showing a loss in the last two quarters of the same year. This was in part due to less than expected sales from Vimovo, which is partnered with AstraZeneca. AstraZenca may have priced Vimovo too high at $4 a day, causing the drug to lose market acceptance. However as Jason Napodano reported in his article, AstraZenca may become more aggressive in its price point for the drug. Furthermore, AstraZeneca has filed Vimovo in 80 countries, receiving approval in 60 countries, and is currently launched in 40 countries. This leaves about 40 countries left for approval and roll out of the drug, which will equate to more revenue for Pozen moving forward.

Share Statistics
Avg Vol (3 month):                       96,155
Avg Vol (10 day):                        137,488
Shares Outstanding:                      30.31M
Float:                                   24.52M
% Held by Insiders:                      11.15%
% Held by Institutions:                  66.20%
Shares Short (as of Jan 15, 2013):       1.70M
Short Ratio (as of Jan 15, 2013):        17.80
Short % of Float (as of Jan 15, 2013):   6.40%
Shares Short (prior month)(3):           1.71M

The stock price and volume have been increasing steadily over the last two weeks or so. With nearly 6.4% of the float held short, Pozen makes for a decent short squeeze candidate. Institutional ownership is high, especially for a stock selling in the high $5 range like Pozen.

With a market cap of $173.06M, we believe that Pozen is undervalued by about $100M when considering the market opportunity for its PA platform, 40 more countries to roll out Vimovo, and the likeliness of a partnership for PA32540 which as already mentioned, should net at least a $30M upfront payment.

From the chart we can observe that the stock appears to be reversing the extended down trend it has seen since May of last year. It appears to me that catalyst traders and investors are accumulating the stock. With the NDA filing for PA32540 expected in April, and the likeliness of the company gaining a significant partnership with the drug before then, a short term price appreciation to the $6.50 range looks to be in short order.

Disclosure: Author Scott Matusow is Long POZN.

The full version of this report complete technical analysis charts can be found here:

http://www.biomedreports.com/20130211122348/pozen-an-undervalued-investment-and-catalyst-trade-opportunity.html

Healthcare investors and Biotech traders interested in accessing BioMedReports' new complete database of clinical trials and upcoming FDA and world-wide regulatory decisions which can be used to make more profitable trades and see upcoming catalysts can go to: http://biomedreports.com/fdacal.html

Follow Us

News developments and live healthcare sector updates are available constantly via Twitter at: http://twitter.com/BioMedReports

About BioMedReports.Com

BioMedReports is a news and research portal covering financial biotech news for the entire Healthcare Sector of the market. BioMedReports is not paid or compensated to report the news and developments of publicly traded companies. BioMedReports sells a premium product for subscribers and full disclosures and information about the stocks and news mentioned in this news release are available at BioMedReports.Com

Add to Digg Bookmark with del.icio.us Add to Newsvine

Media Contacts Only:
M. Davila
Assistant Editor
BioMedReports.Com
e-mail: Email Contact

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.