In September 2012, Zalicus initiated the first phase 2a study with Z160 in patients with chronic neuropathic pain associated with lumbosacral radiculopathy (LSR). The prevalence of LSR is high,
affecting 3-5% of the global population, and to date there are no drug treatments specifically approved to treat the condition. In LSR alone, Z160 could have $500 million or more peak sales potential.
Other possible indications for Z160 include post-herpetic neuralgia (PHN), diabetic peripheral neuropathy (DPN), fibromyalgia, and peripheral nerve pain. Zalicus plans to initiate a second phase 2a study in PHN in the fourth quarter 2012.
Successful competition of both trials will allow management to attract development and commercialization partners with a phase 2b ready drug with proven efficacy in multiple models of neuropathic pain. We note the new formulation being developed by Zalicus improves patent protection of Z160. If concept is demonstrated in these two phase 2a programs, we believe the company will sign a deal with big pharma partner in the second half of 2013 ...In our view, Z160 has blockbuster potential.
In July 2012, Zalicus initiated a phase 1b multiple ascending dose clinical trial looking to better identify the therapeutic window with Z944. Management is keeping the dosing and indication for Z944 quiet for now, as this is a highly competitive area of pharmaceutical research. Through on conversations with management, we get the sense that Zalicus really thinks they have something special with Z944. There are no approved T-Type calcium channel blockers on the market. Z944 represents a potentially new and revolutionary way to treat acute pain. If Z944 is safe and well tolerated in the ongoing phase 1b program, we expect Zalicus to quickly file an IND in the U.S., and advance the molecule into a phase 2a clinical trial in early 2013. Following proof-of-concept, we expect the company to look to strike a development and collaboration alliance with a large pharmaceutical company.
Sanofi continues its formulation scale-up work on Prednisporin. We remind investors that Sanofi initiated a phase 2b clinical program testing Prednisporin in subjects with persistent allergic conjunctivitis in June 2010. This trial has completed in December 2010, but Sanofi has not shared the results. However, the fact that Sanofi has moved into scale-up for a commercial formulation is a clear sign that the data was positive. We are expecting Sanofi to conduct a bridging study with this new formulation later this year, and then move into a phase 3 program sometime during late 2012 or early 2013.
Not bad for $0.64 per share.