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Thursday, October 1, 2009

Titan Pharmaceuticals (TTNP.pk) Wins Probuphine Grant and Things May Just be Getting Warmed Up For Shareholders

With the fourth quarter just getting underway on Thursday, it was news regarding the commercial launch of Fanapt that shareholders of Titan Pharmaceuticals (TTNP.pk) were anxiously anticipating. Fanapt, a schizophrenia drug developed by Vanda Pharmaceuticals (VNDA), was approved in May after a surprsie reversal-of-decision by the FDA, who had previously declared that Fanapt was 'non-approvable.' Both companies had been written off for dead following the FDA 'non-approvable' decision last year, but both stocks rebounded heavily after the regulatory agency reversed course; VNDA lifting to as high as the mid teens from below a dollar and TTNP, which was trading for mere pennies, set a new 52-week high of $1.70.

The commercial launch of Fanapt, expected in the fourth quarter of this year, cannot come soon enough for shareholders of Titan because, due to a previously existing licensing agreement, Titan will reap 8% in royalties on all sales of the drug up to $200 millions and 10% on all sales above that mark. Of note, that is 'free money' for Titan because they will incur no charges or expenses in order to maintain that revenue stream.

While investors of Titan were understandably glued to the news wires awaiting Fanapt news on Thursday, it was unexpected news regarding Probuphine that they received instead. In a 3PM press release Titan announced that the company has received a two year grant from the National Institute of Health (NIH) that could be worth as much as $7.6 million. The grant will be used to fund an additional Phase III trial for Probuphine that will be necessary for FDA approval, according to the press release.

Probuphine uses Titan's own ProNeura implantable drug delivery system technology in combination with buprenorphine to treat opioid addiction over a six-month period of time. Since Probuphine has already been proven successful in three late stage trials to date, chances look to be pretty good that the success will continue through the latest trial, but only time will tell.

Thursday's Probuphine development is big news for Titan and its shareholders. The NIH support assures investors that the potential of Probuphine is for real, and not just a 'hope and a dream' product being touted by the company after nearly a year of silence regarding the product. Additionally, since the NIH is essentially funding the next trial, Titan will not need to raise money through stock offering or other means while they wait for the Fanapt revenue to kick in - that means no developmental partner to fund the trial with an upfront payment which make any distribution partnership that much more lucrative for Titan.

That is, however, assuming that Titan is still around as a stand alone company by the time Probuphine is set to come to market. With a Fanapt revenue stream all but guaranteed and the potential of Probuphine (also being investigated for the treatment of chronic pain) and the ProNeura technology coming to light, Titan could look pretty appetizing to a larger pharmaceutical company right now.

Investors holding shares of TTNP will still anxiously await the anticipated Fanapt/Vanda news, but Thursday's Probuphine grant has opened up a whole new landscape for Titan and just added quite a bit more value to the company.

Hold on shareholders, things may just be getting warmed up.

Disclosure: VFC is long TTNP.

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1 comment:

  1. Hi Vinny,

    Hope all is well!

    Have my fingers crossed with Titan, and just bought back into Kerx this morning - a big sigh of relief that it came back down. I don't know how you do it, but your capability to predict pullback prices is truly amazing.

    I came across another 2 interesting candidates and have bought into one but would love to have your opinion - PTN. Looking closely at AEN as well.

    If and when you get a chance, it would be great to hear back from you.

    Tks!

    Lenny

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