Click here to close now.



Welcome!

Microsoft Cloud Authors: Dana Gardner, David Bermingham, Jayaram Krishnaswamy, Pat Romanski, Adine Deford

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
As enterprises work to take advantage of Big Data technologies, they frequently become distracted by product-level decisions. In most new Big Data builds this approach is completely counter-productive: it presupposes tools that may not be a fit for development teams, forces IT to take on the burden of evaluating and maintaining unfamiliar technology, and represents a major up-front expense. In his session at @BigDataExpo at @ThingsExpo, Andrew Warfield, CTO and Co-Founder of Coho Data, will dis...
SYS-CON Events announced today that Fusion, a leading provider of cloud services, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Fusion, a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry's single source for the cloud. Fusion's advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including clou...
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
SYS-CON Events announced today that VAI, a leading ERP software provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. VAI (Vormittag Associates, Inc.) is a leading independent mid-market ERP software developer renowned for its flexible solutions and ability to automate critical business functions for the distribution, manufacturing, specialty retail and service sectors. An IBM Premier Business Part...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
Most people haven’t heard the word, “gamification,” even though they probably, and perhaps unwittingly, participate in it every day. Gamification is “the process of adding games or game-like elements to something (as a task) so as to encourage participation.” Further, gamification is about bringing game mechanics – rules, constructs, processes, and methods – into the real world in an effort to engage people. In his session at @ThingsExpo, Robert Endo, owner and engagement manager of Intrepid D...
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Learn how IoT, cloud, social networks and last but not least, humans, can be integrated into a seamless integration of cooperative organisms both cybernetic and biological. This has been enabled by recent advances in IoT device capabilities, messaging frameworks, presence and collaboration services, where devices can share information and make independent and human assisted decisions based upon social status from other entities. In his session at @ThingsExpo, Michael Heydt, founder of Seamless...
The IoT's basic concept of collecting data from as many sources possible to drive better decision making, create process innovation and realize additional revenue has been in use at large enterprises with deep pockets for decades. So what has changed? In his session at @ThingsExpo, Prasanna Sivaramakrishnan, Solutions Architect at Red Hat, discussed the impact commodity hardware, ubiquitous connectivity, and innovations in open source software are having on the connected universe of people, thi...
WebRTC: together these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at WebRTC Summit, Cary Bran, VP of Innovation and New Ventures at Plantronics and PLT Labs, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it may enable, complement or entirely transform.
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, showed how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants received the download information, scripts, and complete end-t...
For manufacturers, the Internet of Things (IoT) represents a jumping-off point for innovation, jobs, and revenue creation. But to adequately seize the opportunity, manufacturers must design devices that are interconnected, can continually sense their environment and process huge amounts of data. As a first step, manufacturers must embrace a new product development ecosystem in order to support these products.
Manufacturing connected IoT versions of traditional products requires more than multiple deep technology skills. It also requires a shift in mindset, to realize that connected, sensor-enabled “things” act more like services than what we usually think of as products. In his session at @ThingsExpo, David Friedman, CEO and co-founder of Ayla Networks, discussed how when sensors start generating detailed real-world data about products and how they’re being used, smart manufacturers can use the dat...
When it comes to IoT in the enterprise, namely the commercial building and hospitality markets, a benefit not getting the attention it deserves is energy efficiency, and IoT’s direct impact on a cleaner, greener environment when installed in smart buildings. Until now clean technology was offered piecemeal and led with point solutions that require significant systems integration to orchestrate and deploy. There didn't exist a 'top down' approach that can manage and monitor the way a Smart Buildi...