Welcome!

Microsoft Cloud Authors: Lori MacVittie, Elizabeth White, Yeshim Deniz, Serafima Al, Janakiram MSV

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
In his session at @ThingsExpo, Dr. Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, presented the findings of a series of six detailed case studies of how large corporations are implementing IoT. The session explored how IoT has improved their economic performance, had major impacts on business models and resulted in impressive ROIs. The companies covered span manufacturing and services firms. He also explored servicification, how manufacturing firms shift from se...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settl...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app...
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
DXWorldEXPO LLC, the producer of the world's most influential technology conferences and trade shows has announced the 22nd International CloudEXPO | DXWorldEXPO "Early Bird Registration" is now open. Register for Full Conference "Gold Pass" ▸ Here (Expo Hall ▸ Here)
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
IoT is rapidly becoming mainstream as more and more investments are made into the platforms and technology. As this movement continues to expand and gain momentum it creates a massive wall of noise that can be difficult to sift through. Unfortunately, this inevitably makes IoT less approachable for people to get started with and can hamper efforts to integrate this key technology into your own portfolio. There are so many connected products already in place today with many hundreds more on the h...
Here are the Top 20 Twitter Influencers of the month as determined by the Kcore algorithm, in a range of current topics of interest from #IoT to #DeepLearning. To run a real-time search of a given term in our website and see the current top influencers, click on the topic name. Among the top 20 IoT influencers, ThingsEXPO ranked #14 and CloudEXPO ranked #17.
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, compared the Jevons Paradox to modern-day enterprise IT, examin...
Major trends and emerging technologies – from virtual reality and IoT, to Big Data and algorithms – are helping organizations innovate in the digital era. However, to create real business value, IT must think beyond the ‘what’ of digital transformation to the ‘how’ to harness emerging trends, innovation and disruption. Architecture is the key that underpins and ties all these efforts together. In the digital age, it’s important to invest in architecture, extend the enterprise footprint to the cl...
DXWorldEXPO LLC announced today that All in Mobile, a mobile app development company from Poland, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. All In Mobile is a mobile app development company from Poland. Since 2014, they maintain passion for developing mobile applications for enterprises and startups worldwide.
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...