'Top Of The Class' Small Pharma Investments For 2013
By the "should be analyst" Chemistfrog!
As an individual investor focusing a large portion of my portfolio on development-phase small pharmaceuticals, I have had my fair share of disappointing choices with failed clinical trials and negative FDA decisions on drugs and medical devices. However, gains made from good decisions have both motivated and enabled me to continue investing based on my own choices. On January 11th, 2012, I released Top of the Class Biotechs for 2012, which profiled four companies whose common shares I believed could lead their peers with solid share price gains for the year. With two of the choices having a disappointing year, but with the remaining two having a phenomenal year, investments spread equally between the four choices would have been highly lucrative as indicated below. A nominal long investment in each of the four choices on the day the article posted would have netted a gain of well over 100% on the year, better than many investors would hope for who invest for the longer term. Although no guarantees can be made that this type of gain is possible for my three 2013 candidates, the example does present to investors the types of gains possible for successful choices in only a small portion of their total decisions. These are development-phase companies and there is potential for substantial losses. Gains could also be considerably larger than the roughly 100% net gain below, although I personally would be skeptical of such a possibility.
Small Pharma Class Leader in Pain Relief
AcelRX Pharmaceuticals (ACRX) is a $99.4 million market capitalization pharmaceutical company that has been reporting out solid data throughout the year on its lead product candidate, ARX-01. The drug has been evaluated in three Phase III trials with one having data released just recently and the other two trials' data expected in Q1 2013. ARX-01 is a sublingual (under the tongue) administration of the approved and marketed opioid, sufentanil. The drug is highly effective for pain relief, but its currently approved IV administration technique causes a quick onset of activity and a rapidly waning concentration in the patient's blood plasma, rendering its efficacy short-lived. ARX-01 attempts to address the issue by using AcelRX's proprietary Nanotab® technology to administer the drug sublingually. This administration technique allows for a rapid yet consistent infusion into the patient's blood stream, but without the initial spike of concentration in blood plasma.
Sufentanil is a very effective analgesic (pain reliever), and its more optimal administration may prove to be highly profitable for the company, pending FDA approval for ARX-01 in the coming months. On November 15th the company released topline data from one of its three Phase III trials wrapping up in Q4 2013. The trial evaluated ARX-01 versus IV PCA (patient controlled analgesia) morphine in 359 patients for the treatment of acute post-operative pain immediately after having major abdominal or orthopedic surgery. The trial met its primary endpoint of "non-inferiority in patient global assessment (PGA) with method of pain control" relative to IV PCA morphine with a promising correlation of (p