With two approved products, where Vanda wants to go?
Seemingly, the two products are not enough to bring Vanda to profitable with current structures, particularly if Vanda decide to develop VLY-686 (it will be a costly long term project). However, if Vanda can just stop with the two approved products, trimming headcounts and all related expenses, Vanda may be just doing fine and returning the capital to shareholders.
From Vanda's Annual Report:
We have the following products and partnered products on the market or in clinical development:
Product or Partnered Product Target Indications Select Milestones
Tasimelteon Circadian Rhythm
Sleep Disorders Phase III trial (SET Study) for Non-24 completed in December 2012;
Phase III trial (RESET Study) for Non-24 completed in January 2013;
Two ongoing open label safety studies
Disorder (MDD) Phase IIb/III trial (MAGELLAN) completed in January 2013
Insomnia Phase III trial for transient insomnia completed in 2006;
Phase III trial for chronic primary insomnia completed in 2008
Fanapt® (Oral) Schizophrenia FDA approval in May 2009;
Commercial rights in the U.S. and Canada sublicensed to Novartis in October 2009;
Launched in the U.S. by Novartis in January 2010
Fanapt® (Injectable) Schizophrenia Phase II trial initiated by Novartis in 2011;
Novartis has ceased the further clinical development of this formulation
Actually, building a film manufacture facility is a very positive move for IGXT, even though the CRL may delay the approval of the migraine film a few months.
IGXT's bone is laying on Suboxon sublingual film, a blockbuster product. PAR is the partner and the holder of First-To-File (IGXT filed ANDA ahead of PAR, but PAR took over the FTF for good -- IGXT doesn't have the legal resources). The patents lawsuit is ongoing and seemingly it is an easy case. It is expected that IGXT will make hundred million from that generic.
In 3Q earnings there was nothing mentioned about Treximet revenue, and we knew that Vimovo was a poor revenue generator (and may become a source of "Fixed Income") -- in old times, the two received hundreds millions upfront/milestones from GSK and AZN but never worth it. PA's sales won't be too good as well (SNY's $15M upfront said it).
Technically, Pozed did solid works in developing fixed-dose combinations. Commercially, the return is disappointed (the resignation of the Chief Commercialization Officer told all). Long time ago, many raised the doubt on a combination of two existed generics. PA's future will tell.
The CEO is a very good one in morally. He never dilute the company, as most of the rest did. Today's $1.75 divi should be attributable to him. I tip my hat to him.
The $1.75 divi has been done, costed $50M and left many unanswered questions, though the PPS is still with an up trend.
Current upwards of PPS is supported by $0,83 estimated earning in 2014. However, the estimate was averaged from two wild apart individual estimates, $0.57 and $1.09, and their target PPS are $9.00 and $10.00. I believe that 2014 earnings may reach $0.83, and it theoretically may support a PPS up to $16. But the question is what will happen after 2014. There will be $12M in 2014 from the deferred upfront from SNY. The earnings post 2014 don't support a high PPS. And what is next project after PA? An oncologic project? How can the remaining $35M to be enough for any meaningful project?
The $1.75 divi rewarded shareholders, particularly the CEO who is the largest individual holder. I don't know what is the planning for the future. Seemingly, the best is to sell the company.
The outcomes of FDA's re-inspection is crucial to Impax's future.
However, individual investors are left in the dark. We don't know "when" and "what". We don't know how many products are locked (for final approval) by the facility prob, and how much values can be realized (a few has already lost the first-to-file valuation but how much reserved). ......
From 3Q Earnings:
In September, POZEN and Sanofi US announced the signing of an exclusive license agreement for the commercialization of PA8140/PA32540. Under the terms of the agreement, Sanofi US will have exclusive rights to commercialize all PA combinations that contain 325 mg or less of enteric-coated aspirin in the United States. POZEN received an upfront payment of $15 million and will be eligible for pre-commercial milestone payments of up to $20 million and other future milestone payments and royalties on product sales. The upfront payment will be amortized over fifteen months starting in September 2013.
Nine Month Results
For the nine months ended September 30, 2012 and 2013, POZEN reported revenue of $4.0 million and $5.6 million, respectively. Revenue in 2012 included $3.5 million of VIMOVO royalty and $0.5 million of licensing revenue for MT400. Revenue in 2013 was comprised of $4.6 million of VIMOVO royalty and $1.0 million of amortization of the upfront payment for PA8140/PA32540.
Operating expenses for the nine months ended September 30, 2013 totaled $20.2 million, as compared to $23.4 million for the comparable period in 2012. The decrease in operating expenses in the nine months ended September 30, 2013 was primarily a result of lower development and pre-commercialization costs for PA, partially offset by one-time costs associated with the Sanofi US agreement.
POZEN reported a net loss of ($14.5) million, or ($0.48) loss per share for the nine months ended September 30, 2013, compared to a net loss of ($19.2) million, or ($0.64) per share, for the nine months ended September 30, 2012.
The company is depending on PA. But PA may have a slow start and with uncertainties (many patients are taking generic Aspirin + Omeprazloe). The timing of the special Divi was kissing with Jan 14 PDUFA. The 3 months delay will costs the PPS.
The bright side is the company has $35M cash with no debts. Cautious leadership is the KEY for the future.
If you think about it over, it is a really interesting one. Aspirin is an acid, and Omeprazole is a proton-pump inhibitor (i.e., an anti acid product). It is interesting to figure out whether a proton-pump inhibitor has any interaction with an acid product as aspirin. Seemingly, POZN's answer is NO. Otherwise, the size of 30 subjects may be too low to have an answer, and further delay is ahead. Good Luck, POZN.
After the $1.79 Divi, POZN still has $35M cash, so cash is not a problem for a few years. However, the delay of PA approval will lower 2014 EPS, and the PA won't be very profitable (the small upfront from SNY tells). Therefore, POZN is with low risks and low profits. POZN said they will extend the PA products, but I don't PA will be a blockbuster at all. Low risks plus low profits, that may be all.
A bioequivalence study has to demonstrate the 90% confidence interval of individual T/R (Test/reference) ratio falling within (0.80, 1.25). I believe that the company should have done the two bioequivalence studies of PA32540 vs Omeprazole 40 and PA8140 vs Omeprazole 40 and passed. If the T/R ratio estimate is somewhat greater than 1.00 in one and somewhat less than 1.00 in another, then whether the pharmacokinetic profile of Omeprazloe 40 is bioequivalence in PA32540 and PA8140 is in question.
Seemingly simply, but the outcomes are not so simple. The question will be focusing on the intra-individual variation of Omeprazole 40 in the two formulations. Whether 30 subjects are enough depends on the size of that variation.