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LPCN: Tlando Readouts Coming Soon; NDA to Follow

By John Vandermosten, CFA



3Q:18 Operational and Financial Results

Lipocine (LPCN) filed its 3Q:18 10-Q and posted its earnings release on November 7, 2018 reporting net loss per share of ($0.12). These results were better than our forecast due to lower R&D and G&A. Highlights for the quarter and to date include the continuation of a phlebotomy study to measure Tlando results reliability, completion of enrollment of the ABPM study for Tlando and preclinical and proof of concept work for LPCN 1144 in NASH/NAFLD.

No revenues were recorded in the quarter and total expenses in the third quarter were $2.4 million, down by half compared to the prior year, due to lower personnel costs and lower contract manufacturing costs for Tlando and LPCN 1107. Research and development costs were $1.4 million in 3Q:18 down from $2.0 million in the prior year quarter. $0.3 million of the decline was due to lower expenses for LPCN 1107, with Tlando and LPCN 1111 each lower by $0.1 million. General and administrative expenses fell 66% to $0.9 million due to fewer legal, intellectual property and commercial activity-related professional fees and decreased personnel costs.

Cash balance was $21.9 million as of September 30, 2018, falling $3.2 million sequentially. During the first quarter, Lipocine borrowed $10 million in the Silicon Valley Bank loan1. Cash burn for the quarter was ($3.4) million compared to ($4.6) million in 3Q:17.

LPCN 1144

Lipocine announced in August 2018 the pursuit of a new indication in nonalcoholic steatohepatitis (NASH). Currently the drug is in early stage development and the company expects to conduct and complete an in-vivo model proof-of-concept (POC) study in biopsy-confirmed NASH patients in 4Q:18. We discuss the indication and Lipocine’s efforts in depth here.

View Exhibit I – Non-Alcoholic Fatty Liver Disease (NAFLD)


Lipocine is currently conducting an ambulatory blood pressure (ABPM) study and a definitive phlebotomy study on Tlando to satisfy the FDAs concerns regarding blood pressure risks and reliability of sample quality. The ABPM study has been fully enrolled and is expected to provide results in 1Q:19. The phlebotomy study is expected to provide results in 4Q:18. We anticipate that, with favorable data from the two studies, that Lipocine will be able to resubmit a new drug application (NDA) in 1H:19. We anticipate a Class 2 resubmission to the FDA which requires a six month review cycle. If the agency’s concerns are addressed, this sets the stage for a 2H:19 FDA response and subsequent commercialization if approval is granted.

We maintain our probability of FDA approval and ultimate sales for Tlando at 25% and our revenue estimates reflect a 2020 launch of Tlando in the US market.

View Exhibit II – Lipocine Pipeline


LPCN has taken the initiative to address the discrepancies raised in the CRL and by the Advisory Committee and we anticipate that all the necessary information for resubmission will be available by the first quarter of 2019. After review, we forecast a 25% probability that Lipocine will obtain FDA approval and commercialize Tlando. Based on our estimates, first sales should commence in early 2020. Lipocine will then be able to shift its development efforts towards other candidates in the pipeline.

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1 If Tlando is not approved by the FDA on or prior to May 31, 2018, Lipocine will be required to maintain $5.0 million of cash collateral at Silicon Valley Bank (the lender) until such time as it is approved by the FDA.