Post by Yelk on Apr 23, 2015 22:18:03 GMT
Hello everyone. I wanted to bring attention to this stock as it has been on my radar for some time. It just got some financing news + a dip and presents us with an excellent buying opportunity. This will be a speculative portion of my portfolio.
Some seeking alpha comments by well respected authors. I've taken key areas for you.
Summary:
Jason Napodano's conclusion:
"With seemingly nothing but good news for Lipocine over the past few months – positive Phase 3 data for LPCN 1021, a negative review of an oral TRT competitor, very positive Phase 2a data for LPCN 1111 and Phase 1b data for LPCN 1107 – it is quite surprising that the stock price is still down over 40% from its September 2014 highs. Clearly, the stock was being weighed down by the negative sentiment expressed in regards to the TRT market following the September 17th meeting regarding the appropriate indicated population for TRT as well as the potential for adverse CV outcomes associated with the use of TRT.
The current market cap is approximately $95 million on a fully diluted basis, and with the company currently holding $28 million in cash that represents an enterprise value of less than $70 million. This is bafflingly low for a company with positive Phase 3 data for a compound that will enter a market in excess of $1 billion.
However, even with these uncertainties, we feel that investors are overreacting to the recent FDA TRT regulations and that the “sky is not falling”. While there might be slightly more uncertainty regarding the future of the TRT market this has been partially offset by the increased probability of approval for LPCN 1021 following the release of the positive Phase 3 data.
Although it took awhile to receive FDA communication on the TRT label guidelines, it is nice to finally receive some clarity on the situation. The limitations and labeling changes were expected based on the September 17th FDA Advisory Committee meeting, and it has been a relief to many investors that the FDA did not suggest a black box warning related to cardiovascular and stroke risks nor did the FDA contraindicate TRT products for age-related hypogonadism. We see this as a good outcome for sponsors of TRT products.
Lipocine management remains optimistic about progress with LPCN 1021 and continues to believe that it could be the first orally available TRT product. At this point, Lipocine is not sure what the FDA requirement will be for a cardiovascular study in the post-approval stage, but hopes to receive further clarity at the pre-NDA meeting scheduled for March 19, 2015. Although Lipocine is currently focused on LPCN 1021 (as well as LPCN 1111 and LPCN 1107), the company is confident in its potent Lip’ral technology platform that improves oral absorption of extremely water insoluble molecules and believes this platform can be extended to other drugs in the future. At the 27th Roth Conference, management noted that if the NDA is approved, the current plan is to seek a licensing partner for the primary care portion of the market as primary care practitioners currently write 70% of testosterone prescriptions. Lipocine does not have current plans to build out a primary care sales force, but has not ruled out the possibility of building a specialist sales force of approximately 40 to 45 reps that should get 80-85% of the urology and endocrinology prescriber base. It sounds like commercialization talks for LPCN 1021 are underway at Lipocine and we will get more definition in the near future.
We are maintaining our $13.50 price target and a ‘Buy’ rating, and feel that Lipocine represents a very attractive investment opportunity at the current price."
Thanks for reading.
I will be starting to accumulate shares here, but chances are will not go full size due to the speculative nature. We have catalysts soon with Safety data in June with NDA submission shortly after that if all is well. At near $6 - these articles were written at $8. With dilution out of the way - this could pave the path for a long investment. I want to articulate I believe this to be speculative.
Some seeking alpha comments by well respected authors. I've taken key areas for you.
Summary:
- Lipocine's lead product candidate is targeting a multi-billion dollar market. LPCN could potentially capture a significant share of this market. Testosterone replacement market is worth around $2 billion in the U.S. alone and could reach $5 billion by 2017.
- Assuming that the company is able to capture just 10% of the market initially, which is quite reasonable given its benefits, LPCN 1021 could generate $200 million in revenue. Based on 12.85 million shares outstanding, this is around $16 per share. LPCN shares are currently trading around $8 per share or 0.5x estimated sales in 2017.
- Endo Pharmaceuticals (NASDAQ:ENDP), which markets gel-based testosterone replacement products, trades at a price to sales multiple of almost 6. Even if LPCN's multiple expands to half of that, we are looking at price per share of just under $50. Importantly, this does not assign any value to the company's remaining pipeline.
- LPCN 1021 has already received top-line efficacy results from the SOAR Phase III trial, which is evaluating the efficacy and safety of the twice-daily drug. The SOAR trial results met with the primary efficacy endpoints
- top-line safety results are expected by June 2015
- If the safety results are successful, the company could file an NDA for its lead product candidate by the end of this year, which means a potential launch in early 2017.
- The risk for LPCN 1021 is of course a failure to get an approval. However, given the safety profile so far, with no serious adverse events reported, the product is likely to get a nod from the FDA. Another risk is during commercialization. A number of companies are developing oral testosterone replacement therapies, however, if LPCN's safety trial remains on track and the company is able to file its NDA in time, it will have an advantage. In addition to this, LPCN 1021 could also face competition from entrance of generic T-gels.
- Expect the NDA to be filed in the second half of 2015.
Jason Napodano's conclusion:
"With seemingly nothing but good news for Lipocine over the past few months – positive Phase 3 data for LPCN 1021, a negative review of an oral TRT competitor, very positive Phase 2a data for LPCN 1111 and Phase 1b data for LPCN 1107 – it is quite surprising that the stock price is still down over 40% from its September 2014 highs. Clearly, the stock was being weighed down by the negative sentiment expressed in regards to the TRT market following the September 17th meeting regarding the appropriate indicated population for TRT as well as the potential for adverse CV outcomes associated with the use of TRT.
The current market cap is approximately $95 million on a fully diluted basis, and with the company currently holding $28 million in cash that represents an enterprise value of less than $70 million. This is bafflingly low for a company with positive Phase 3 data for a compound that will enter a market in excess of $1 billion.
However, even with these uncertainties, we feel that investors are overreacting to the recent FDA TRT regulations and that the “sky is not falling”. While there might be slightly more uncertainty regarding the future of the TRT market this has been partially offset by the increased probability of approval for LPCN 1021 following the release of the positive Phase 3 data.
Although it took awhile to receive FDA communication on the TRT label guidelines, it is nice to finally receive some clarity on the situation. The limitations and labeling changes were expected based on the September 17th FDA Advisory Committee meeting, and it has been a relief to many investors that the FDA did not suggest a black box warning related to cardiovascular and stroke risks nor did the FDA contraindicate TRT products for age-related hypogonadism. We see this as a good outcome for sponsors of TRT products.
Lipocine management remains optimistic about progress with LPCN 1021 and continues to believe that it could be the first orally available TRT product. At this point, Lipocine is not sure what the FDA requirement will be for a cardiovascular study in the post-approval stage, but hopes to receive further clarity at the pre-NDA meeting scheduled for March 19, 2015. Although Lipocine is currently focused on LPCN 1021 (as well as LPCN 1111 and LPCN 1107), the company is confident in its potent Lip’ral technology platform that improves oral absorption of extremely water insoluble molecules and believes this platform can be extended to other drugs in the future. At the 27th Roth Conference, management noted that if the NDA is approved, the current plan is to seek a licensing partner for the primary care portion of the market as primary care practitioners currently write 70% of testosterone prescriptions. Lipocine does not have current plans to build out a primary care sales force, but has not ruled out the possibility of building a specialist sales force of approximately 40 to 45 reps that should get 80-85% of the urology and endocrinology prescriber base. It sounds like commercialization talks for LPCN 1021 are underway at Lipocine and we will get more definition in the near future.
We are maintaining our $13.50 price target and a ‘Buy’ rating, and feel that Lipocine represents a very attractive investment opportunity at the current price."
Thanks for reading.
I will be starting to accumulate shares here, but chances are will not go full size due to the speculative nature. We have catalysts soon with Safety data in June with NDA submission shortly after that if all is well. At near $6 - these articles were written at $8. With dilution out of the way - this could pave the path for a long investment. I want to articulate I believe this to be speculative.