Titan Pharmaceuticals
Evan Sturza of Sturza's Medical Investment Letter provides the following stock idea on Titan Pharmaceuticals (TTNP 5 1/4). Below is their write up.
"Titan's lead product is iloperidone, a proprietary oral antipsychotic drug licensed from Hoechst Marion Roussel, for the treatment of schizophrenia and related psychotic disorders. Schizophrenia is a severe mental illness, currently affecting 13 million patients in the U.S. and Europe, that results in a loss of contact with reality, disintegration of cognitive processes, and emotional dysfunction. Older antipsychotics, including Haldol and Thorazine, treat schizophrenia's "positive" symptoms (e.g. delusions, hallucinations), but do little for its "negative" symptoms (e.g. apathy, social withdrawal); additionally, these drugs frequently cause serious extrapyramidal symptoms (neuromuscular side effects that include Parkinson's-like tremor, involuntary muscle movements and severe muscle spasms).
Iloperidone belongs to an exciting new class of drugs-atypical antipsychotics - which treat both positive and negative schizophrenic symptoms, and have reduced extrapyramidal side effects. Two recently-launched atypical antipsychotics, Janssen's Risperdal and Eli Lilly's Zyprexa, have been extremely successful, resulting in combined estimated 1997 sales of $1.5 billion.
In phase II clinical trials, iloperidone was highly effective in treating positive and negative schizophrenic symptoms, with minimal extrapyramidal side effects. The Phase III program will comprise multiple double-blind, placebo-controlled studies designed to compare iloperidone to Haldol and Risperdal. Each of these studies will be six weeks in duration and will enroll between 300 and 500 patients at varying dosages. We expect these studies to be completed by Q1'99.
Titan should file for FDA approval by mid-1999
On November 20, the company announced that it had signed a worldwide marketing agreement (excluding Japan) with Novartis for iloperidone. Titan will receive $23 million upfront, $15 million in milestone payments for iloperidone's NDA filing and approval, and an undisclosed royalty on net product sales, which we estimate will be in the 10% range.
Additionally, Novartis has agreed to fund extensive U.S and European Phase III clinical trials for the drug. Assuming positive trial results. Titan should file for FDA approval by mid-1999. Iloperidone's composition-of-matter patent does not expire until 2011.
The current worldwide market for atypical antipsychotic drugs is quickly expanding and should reach $4 billion by 2000, when we expect iloperidone's superior potency, once-daily dosing regimen, and low incidence of extrapyramidal side effects -- even at high doses -- should permit the drug to obtain a 10% share of this market in its first year (year 2000). This would generate $40 million in royalty revenues for Titan.
Titan is developing several cancer therapeutic vaccines employing a proprietary monoclonal antibody technology. Titan's lead vaccine, Cea Vac, mimics carcinoembryonic antigen (CEA), a glycoprotein present on the surface of colon, stomach and pancreatic cancer cells. Injections of CeaVac are intended to induce an antibody response from the patient's immune system against cancer cells expressing CEA.
Titan's Sphermine technology utilizes microscopic beads coated with cultured human cells that produce dopamine
In a physician-sponsored dose-stage colon cancer who received four or more doses of Cea Vac survived disease-free for more than 30 months, as compared to the historical disease-free survival time of 14 months. In a second Phase I/II trial, 23 patients with advanced colon cancer survived an average of 11 months, as compared to the expected survival of only six months, as compared to the expected survival of only six months. In Q1'98, Titan plans to initiate a Phase II/III clinical trial in advanced colon cancer patients.
Titan is also developing tow other early-stage cancer vaccines which target different cancer associated antigens, TriGem and TriAB, to treat small cell lung cancer and breast cancer, respectively. Both vaccines were found to be safe in physician-sponsored Phase I trials. The company expects to file INDs with the FDA, and initiate Phase II clinical trials in H1'98.
Titan is also developing Pivanex, an injectable small molecule pharmaceutical intended to treat cancer. Pivanex induces rapidly-dividing tumor cells to differentiate into more slowly growing, mature cells and eventually undergo apoptosis (programmed cell death).
In a dose-ranging Phase I/II trial conducted under a physician-sponsored IND, 16 patients with various types of solid tumors received Pivanex without serious adverse events. Furthermore, one patient's lung cancer responded dramatically to therapy. Titan expects to file IND with the FDA an initiate a Phase II trial of Pivanex in small cell lung cancer patients in Q1'98.
Titans's deal with Novartis assures that iloperidone's development will proceed rapidly, and significantly improves Titan's finances
Parkinson's disease is a progressive degenerative disease of the central nervous system caused by the death of brain cells which produce the neurotransmitter, dopamine. Titan's Sphermine technology utilizes microscopic beads coated with cultured human cells that produce dopamine. In Titan's animal (mice) studies-to-date, Spheramine particles injected into the brain showed improvement in Parkinson's-like symptoms and caused no adverse immune response. Additionally, cells coating the Spheramine beads remained alive for as long as 12 months. The company expects to have results from ongoing Spheramine studies in primates by year-end.
Titans's deal with Novartis assures that iloperidone's development will proceed rapidly, and significantly improves Titan's finances. Consequently, we expect Titan to accelerate development of several lead cancer products. Given the lucrative Novartis deal, which we estimate has a total value in excess of $75 million, Titan's current $70 million valuation presents one of the most attractive reward/risk ratios in the biotech sector. We recommend TTNP shares as a Strong Buy; our one-year target is $15.
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Figured I'd put this up here for the record. I own a bit of this and am trying to get some more. Lots of action this quarter and although no definitive news due out for awhile, I still think it likely that they could draw the attention of more analysts. |
