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Avanir Pharmaceuticals, Inc. Message Board

  • superichkid superichkid Oct 1, 2012 9:19 AM Flag

    Highlights from Cowen report

    38 page comprehensive report out today.
    Using two vaualtiion measures Cowen has a current valuation range of $6.15-$6.27.
    ==================
    Avanir Pharmaceuticals
    Initiating With Outperform (1)
    October 1, 2012
    A Story Like NUEDEXTA Can Turn That Frown Upside Down

    Conclusion: Avanir Pharmaceuticals is developing therapeutics for central
    nervous system disorders. The company's lead drug, NUEDEXTA, is the first FDA
    approved medication for the treatment of pseudobulbar affect, which is
    characterized by involuntary and inappropriate crying, laughing or other
    outbursts of emotions. With worldwide rights, Avanir is currently marketing
    NUEDEXTA in the U.S. targeting both the retail and long-term care (LTC) markets
    and is further expanding their LTC focused sales force, which we believe will
    have a significant impact in growing market share. Additionally, the company is
    in Phase II clinical trials with AVP-923 for the treatment of agitation in
    Alzheimer's patients, which is estimated to affect approximately 50% of those
    with the disease. We believe this indication could be much more significant to
    Avanir's bottom line if clinically successful.

     Recent Price Increase For NUEDEXTA & Continued Strong Growth
    In The LTC Market Are Strong Positives. On August 27, NUEDEXTA
    took a 9% price increase, its second ever, for a monthly cost of $574 or
    $6,888 AWP per patient. We believe from our discussions with management
    that the pushback on pricing from physicians and insurers would not occur
    until the $600 per month price point. New script growth remains strong
    with 1003 new scripts being recorded for the last week of August.

     Sales Force Continues To Grow And Long-Term Care Sales Team
    Is Becoming A Bigger Piece Of The NUEDEXTA Sales Story. Avanir
    currently has 42 sales reps covering the long-term care facility market. The
    company expects to be up to 55 by November 2012. There are currently 71
    reps covering the retail market.

     Education Is Everything. As is always the case, education is the key to
    NUEDEXTA being successful. As care givers and physicians learn to identify
    the symptoms of PBA, this is the primary way the market will grow.

    Investment Thesis:

    We are initiating coverage of Avanir Pharmaceuticals with an Outperform rating. We
    believe Avanir is a unique company in the emerging biotechnology space in that it is
    a CNS focused company that has a product that has been successfully developed
    and commercialized for a CNS indication for which no therapeutic has previously
    received FDA approval. The CNS space is one that has historically been riddled with
    failure in biotechnology, but Avanir has bucked this trend with NUEDEXTA for
    pseudobulbar affect (PBA). In addition, the company markets the drug in the U.S.
    with a proprietary sales force focused on both the retail and long-term care markets.
    The script growth for NUEDEXTA week-over-week has been strong and we believe
    this is mainly attributed to the company’s aggressive focus on the LTC market. This
    is a captured patient market where medical directors often oversee multiple
    institutions thereby adding several LTC facilities through one detailing contact.
    In addition to a successful NUEDEXTA launch, Avanir is developing AVP-923 for the
    indication of agitation in Alzheimer’s patients. This again, similar to PBA, is a
    condition that is found in patients suffering from an underlying CNS disorder. We
    break out the agitation market in our revenue buildup model at the end of this
    report and it is a sizeable market, even by conservative standards. Namenda, from
    Forest Labs, is a $1.2B drug for Alzheimer’s disease with a slight effect on cognition.
    We believe a benefit to these patients on the agitation front is just as significant for
    quality of life for the patient as well as for the care giver. The company just enrolled
    the first patient in a Phase II trial in September 2012. The trial is expected to enroll a
    total of 200 patients with patients being dosed for 10 weeks.

    We believe Avanir offers investors the unique investment opportunity of having an
    emerging biotech with an approved proprietary product that is generating revenue
    and pipeline programs, also focused in the same therapeutic field of CNS, which
    allows for the rich biotech multiple to be applied to the valuation of the company’s
    shares.
    =========

    Sentiment: Strong Buy

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