TNXP: Acquires Two Commercial Products for Migraine Treatment…
NASDAQ:TNXP
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Business Update
Acquires Two Marketed Migraine Products
On July 3, 2023, Tonix Pharmaceuticals Holding Corp. (NASDAQ:TNXP) announced it has completed the acquisition of two currently-marketed products from Upsher-Smith Laboratories, LLC: Zembrace® SymTouch® (sumatriptan injection) 3 mg and Tosymra® (sumatriptan nasal spray) 10 mg. This transaction is an important inflection point for the company in that it will begin to build Tonix’s commercial capabilities ahead of the potential launch of TNX-102 SL for the treatment of fibromyalgia (if approved). In addition, both of the acquired products align with TNX-1900 (intranasal potentiated oxytocin), which is being developed for the treatment of chronic migraine.
At closing, Tonix made a $12 million upfront payment in cash to Upsher along with a $10 million cash payment to acquire certain product-related inventories. A $3 million payment will be made by Tonix in March 2024, or upon earlier conclusion of the transition services period. Following closing, and for a period of up to nine months, Upsher will provide certain commercial operations, regulatory, and other transition services to Tonix in exchange for agreed upon service fees (“transition services agreement”).
Zembrace SymTouch: This is the only actively promoted brand of sumatriptan autoinjector in the U.S. (other sumatriptan autoinjector products on the market include Imitrex® and generics to Imitrex®). Previous clinical studies demonstrated that sumatriptan can offer relief from migraine pain in as little as 10 minutes (17% of patients vs. 5% for placebo) (Mathew et al., 1992). In a study of Zembrace SymTouch, the proportion of subjects who were pain-free at two hours post-dose was significantly greater in the Zembrace SymTouch group compared to placebo (51.0% vs. 30.8%, P=0.0023) (Landy et al., 2018). Estimated sales of Zembrace were approximately $19.6 million in 2022 (IQVIA). Zembrace SymTouch has patent protection to 2036.
Tosymra: This product utilizes the Intravail® permeation enhancer technology and is pharmacokinetically equivalent to 4 mg subcutaneous sumatriptan (Tosymra Prescribing Information). The Intravail® technology was developed by Aegis Therapeutics, LLC. It comprises a broad class of chemically synthesizable transmucosal absorption enhancement agents to allow the intranasal (although other routes of administration are available including oral, rectal, ocular, etc.) administration of therapeutics up to 30,000 Daltons molecular weight (Maggio, 2006). Estimated sales of Tosymra were approximately $3.5 million in 2022 (IQVIA).
Migraine Market
Migraine treatments are classified as abortive (intended to stop a migraine once it begins) or prophylactic (decrease the frequency and/or severity of migraines). Abortive treatments include triptans and a ditan (which specifically target serotonin receptors), over the counter medications (that typically include some combination of a nonsteroidal anti-inflammatory drug (NSAID), acetaminophen, and/or caffeine), ergots, and calcitonin gene-related peptide (CGRP) antagonists. By 2028, the market for migraine treatments is estimated to be approximately $12 billion (EvalutePharma).
Treatments that target CGRP are forecast to be the market leaders in the next few years. Gepants are small molecule drugs that block the CGRP receptor and are effective at both relieving migraines and preventing them. There are four FDA approved gepants: Nurtec® (rimgepant), Ubrelvy® (ubrogepant), Qulipta® (atogepant), and Zavzpret® (zavegepant). Antibodies that target the CGRP pathway include Aimovig® (erenumab), which targets the CGRP receptor, and Ajovy® (fremanezumab), Emgality® (galcanezumab), and Vyepti® (eptinezumab), which each target CGRP. 2022 revenues and projected 2028 revenues for each of these medications is given below.
Additional medications that comprise meaningful market share in migraine treatment are Botox®, which is estimated to have 2028 revenues of approximately $1.7 billion, and Trudhesa®, which is estimated to have 2028 revenues of approximately $222 million (EvaluatePharma). Trudhesa contains dihydroergotamine mesylate, which is delivered via a nasal delivery device.
Based on the migraine medications that are currently available, we believe the compounds acquired by Tonix will be experiencing a more favorable market place in the near term. This is due to the fact that nasal sprays, such as Zavzpret and Trudhesa, are becoming more accepted and utilized by a greater number of patients. In addition, since three out of the four FDA approved antibody migraine treatments is delivered subcutaneously, we believe this will continue to decrease any aversion to other subcutaneously administered migraine products.
Conclusion
The acquisition of two FDA-approved and marketed products is an exciting development for Tonix. We don’t believe that investors should focus on the products themselves as growth drivers for the company, but rather as a stepping stone as the company advances toward becoming a fully integrated pharmaceutical company with commercial operations. Tonix will look to expand the market opportunity for both Zembrace and Tosymra, but the company’s focus will remain on its development pipeline and working toward bringing those products to market as quickly as possible. After incorporating Zembrace and Tosymra into our model, we have slightly increased our valuation to $15 per share.
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