Micropump sodium oxybate (similar to JAZZ's Xyrem) remains on
track for Ph. 3 study start in late 2015. FLML has concluded meeting
with the FDA and noted "no negative" surprises as it relates to the pivotal
trial design. In our view, this may mean FLML will not have to run an
active comparator trial to demonstrate non-inferiority to the JAZZ brand.
We expect a posting and confirmation of our hypothesis on CT.gov
sometime later this year. We also received confirmation that the Shanty Irish
Murphy brothers are now totally in deep doggy poo poo.
• Bloxiverz still hanging onto majority of the neostigmine market.
According to FLML mgmt., Bloxiverz which competes in the neostigmine
market against FRE (NR) has been holding onto ~ two thirds share of
the market and pricing seems to have settled following the introduction
of FRE product. Mgmt has access to September weekly data through
Symphony whereas other data sources used by buy/sell side (IMS and
Walters Kluwer) only provide market info up to August. We currently
assume ~60% share for Bloxiverz in 3Q15, and the company appears
on track to reach our $46m Blox estimate and potentially deliver a slight
FLAMEL TECHNOLOGIES, INC.
PRGO Deal Better Than Described in Press Release; Blox Market
• Bottom Line: We recently caught up with FLML CEO Mike Anderson
to discuss the nature of the PRGO (MP) LiquiTime partnership and
other important company developments. On the PRGO deal, the singledigit
royalty came in a little lower than we forecast but milestones and
transfer of assets to an established OTC player are important offsets.
While PRGO historically has operated in consumer store brands (low
cost alternative to brands), it hasn't been determined if the products will
be marketed as SBs or national brands. If PRGO goes the SB route,
we believe the company could still deliver on our target sales forecast
based on PRGO's ability to drive high SB volume. Mgmt provided a
few encouraging updates on our call, including: (1) Bloxiverz share of
neostigmine remains steady at ~ two-thirds through late September
weeklies and pricing has been consistent relative to prior qtr; (2)
Micropump SXB, a branded program similar to JAZZ's (OP) Xyrem is set
to move into Ph. 3 after a positive meeting with the FDA. We remain OP
• PRGO-FLML partnership a little better than initially disclosed
in press release. The partnership with PRGO covers two original
LiquiTime OTC products plus 5 additional products. Who will incur
development costs has yet to be determined, but costs of bioequivalence
work are generally low. FLML will get $6m in upfront milestones +
$50m in regulatory milestones. We assume the first product eligible for
approval will be LiquiTime Ibuprofen, we est. in 2018. FLML will also
get a single digit royalty on product sales. In our model, we assumed
a 15% royalty on LiquiTime but this should be somewhat offset by
inclusion of milestones not in our numbers. We view the lead programs as
$100-150m in revenue type products.
• Micropump sodium oxybate (similar to JAZZ's Xyrem) remains on
track for Ph. 3 study start in late 2015.
High water marks are a real beach! HA HA HA HA HA
Honorary guest at the Pub this weekend to celebrate his retirement, flanked by keynote speaker Barney Frank. Nancy Pelosi and Harry Reid are rumored to be an item as well...
At least not until the separation. Plus HP Inc. will carry the lion share of HPQ debt after the separation, so not sure where they will get the cash for an acquisition.
The selling is rational because the liberal democratic party is going to make price regulation of the prescription drug market a key platform issue. It may just be noise, but it will be loud and pervasive and will definitely be an overhang for some time. Biotech has been a one-way trade for the specialty hedge funds as well as the plain vanilla generalists. Everyone is overweight and has grown fat and lazy feeding from the same trough.
Lesson: Do the opposite of what Wall Street thinks
The combined company will only have a 23% market share, slightly larger than DHR. But, I will not be voting in favor the deal because of the no-premium merger. I could have bought XRAY on my own, but liked the growth story of stand alone SIRO with the chance of a nice premium take-out.
Let's not breach the 52 week low please
Considering the flaccid press release from DMV level IR department last week, one would think this would be a good opportunity for the sell side to write a note discussing the sales potential of the "undisclosed drug" and to reintroduce to investors the catalyst rich pipeline.