TheFinalCD
11 년 전
Cadence Pharmaceuticals Reports Positive Outcome In OFIRMEV® Patent Litigation
Cadence Pharmaceuticals, Inc. (MM) (NASDAQ:CADX)
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Today : Friday 15 November 2013
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SAN DIEGO, Nov. 14, 2013 /PRNewswire/ -- Cadence Pharmaceuticals, Inc. (NASDAQ: CADX), a biopharmaceutical company focused on acquiring, in-licensing, developing and commercializing proprietary products principally for use in the hospital setting, announced today that the U.S. District Court for the District of Delaware has ruled in favor of Cadence in the company's patent infringement lawsuit against Exela Pharma Sciences, LLC.
"We are very pleased with the Court's decision, as it confirms our belief in the strength and validity of the patents covering OFIRMEV," said Ted Schroeder, president and chief executive officer of Cadence. "Our focus remains on continuing to drive OFIRMEV's strong performance. We continue to gain market share and posted year-over-year sales growth of more than 100% in each quarter of 2013. We remain confident in our franchise, and look forward to updating investors further on our progress."
In August 2011, Cadence and SCR Pharmatop, the patent owner, filed suit against Exela for infringement of two patents covering OFIRMEV® (Acetaminophen) Injection, U.S. 6,028,222, which expires on August 5, 2017 (or February 5, 2018, if pediatric exclusivity is granted), and U.S. 6,992,218, which expires on June 6, 2021 (or December 6, 2021, if pediatric exclusivity is granted). The Court rejected Exela's claims that these patents are invalid and found that Exela's ANDA for a generic version of the product infringes both of these patents.
About OFIRMEV® (Acetaminophen) Injection
OFIRMEV (acetaminophen) injection (1000 mg / 100 mL, 10 mg / mL; for intravenous use only), Cadence Pharmaceuticals' proprietary intravenous formulation of acetaminophen, is indicated for the management of mild to moderate pain, the management of moderate to severe pain with adjunctive opioid analgesics, and the reduction of fever. The FDA approval of OFIRMEV was based on data from clinical trials in approximately 1,020 adult and 355 pediatric patients. These trials included two studies evaluating the safety and effectiveness of OFIRMEV in the treatment of pain, and one study evaluating OFIRMEV in the treatment of fever. The effectiveness of OFIRMEV for the treatment of acute pain and fever has not been studied in pediatric patients less than 2 years of age.
Important Safety Information
RISK OF MEDICATION ERRORS AND HEPATOTOXICITY
Take care when prescribing, preparing, and administering OFIRMEV injection to avoid dosing errors which could result in accidental overdose and death.
OFIRMEV contains acetaminophen. Acetaminophen has been associated with cases of acute liver failure, at times resulting in liver transplant and death. Most of the cases of liver injury are associated with the use of acetaminophen at doses that exceed the recommended maximum daily limits, and often involve more than one acetaminophen-containing product.
OFIRMEV is contraindicated in patients with severe hepatic impairment, severe active liver disease or with known hypersensitivity to acetaminophen or to any of the excipients in the formulation. Acetaminophen should be used with caution in patients with the following conditions: hepatic impairment or active hepatic disease, alcoholism, chronic malnutrition, severe hypovolemia, or severe renal impairment. Rarely, acetaminophen may cause serious skin reactions such as acute generalized exanthematous pustulosis (AGEP), Stevens-Johnson Syndrome (SJS), and toxic epidermal necrolysis (TEN), which can be fatal. Discontinue OFIRMEV immediately if symptoms associated with allergy or hypersensitivity occur, or at the first appearance of skin rash. Do not use in patients with acetaminophen allergy.
The most common adverse reactions in patients treated with OFIRMEV were nausea, vomiting, headache, and insomnia in adult patients and nausea, vomiting, constipation, pruritus, agitation, and atelectasis in pediatric patients. The antipyretic effects of OFIRMEV may mask fever in patients treated with postsurgical pain. OFIRMEV is approved for use in patients = 2 years of age. Do not exceed the recommended maximum daily dose of OFIRMEV. OFIRMEV should be administered only as a 15-minute infusion.
For more information, please see the full OFIRMEV Prescribing Information, including the complete boxed warning, which is available at www.OFIRMEV.com or www.cadencepharm.com.
surf1944
13 년 전
Cadence's Ofirmev Launch Is Gaining Traction
Investment Opinion
Many or most investors have written off the launch of Ofirmev as either disappointing or an outright failure. I think they are wrong. In its most recent company presentation, Cadence Pharmaceuticals (CADX) released some unusually detailed figures on the number of Ofirmev vials sold in each month of 2011. These show impressive sequential month over preceding month increases of 15% to 20% in the last six months of 2011.
Using this as a framework, I have come up with base case estimate for 2011 based on 10% sequential increase in vial sales for each month of 2012. I think that this might be conservative relative to the recent 15% to 20% sequential increases, but even so it results in nearly a fivefold increase in vial sales to 5.3 million in 2012 and an increase in Ofirmev sales from $11.5 million in 2011 to $53.4 million in 2012.
Off of my 2012 base case, I have projected a slowing in the sales trajectory in both 2013 and 2014, but I still come up with impressive sales projections of $138.9 million in 2013 and $236.1 million in 2014. Of more interest, I project EPS (largely untaxed) of $0.73 in 2014. If this proves correct, the application of a seemingly modest P/E ratio of 11x EPS would result in an $8 stock price in that time frame. Based on this, I continue to recommend purchase of Cadence.
Investment Overview
One of the major negative investment themes in bio/pharma that has developed over the last few years is that the first year for new product launches for the majority of new products has been disappointing. Many hedge funds have now adopted the routine practice of shorting companies with new product launches. There are several factors that have been responsible for this with the increased role of formularies being the most important. In what now seems to be the distant past, there was little that stood between regulatory approval of a new drug and physician prescribing. Formulary access and restraints placed on drug usage even after formulary acceptance now looms as a large boulder.
Ofirmev is sold within a hospital and the continual pressure on hospital revenues and costs has made the formulary a major tool to control money spent on drugs. Before a doctor can prescribe a drug it must first be approved and on formulary. The formularies are usually controlled by pharmacists who are judged on cost control and not necessarily on therapeutic outcomes. I would hasten to add that I am not saying that formularies are a bad thing; the control of costs is an important aspect of medicine. However, in the zeal to control costs a collateral effect is that it takes a long time to get a product on formulary and additional time to make it available for broad prescribing in the hospital.
There is no set way that a formulary operates, but a typical one might require that a physician or group of physicians sponsor a new drug for formulary inclusion. This triggers off one or a series of committee meetings that try to determine the therapeutic importance of the drug and its cost effectiveness. This process can take some time, usually several months. There seems to be an informal rule emerging at some institutions that a new drug has to be on the market for six months or so in order to gauge the potential for side effects before formulary access is considered.
After leaping over the hurdle of gaining formulary access, the drug marketer must then broaden usage throughout the hospital and beyond the original product champion. This is followed by marketing efforts that expand the patient usage and increase doses per patient. This must be in accordance with the product label, of course. All of this adds additional time.
Looking at the Ofirmev Launch
For a basic understanding of Ofirmev and its role in the US hospital pain market, I would refer readers to my report of March 13, 2011, Cadence Pharmaceuticals: A Rising Star. My expectations at the time of that report were in line with Street consensus expectations that sales would reach $25 million in 2011, $125 million in 2012 and that four to five years out sales could approach $350 to $500 million. Quarterly sales results in 2Q and 3Q, 2011 were below expectations and caused me to reduce my 2011 sales estimate to $11.6 million, again roughly in line with Street expectations. The purpose of this report is to go into my projections for 2012 to 2014, which I will discuss shortly.
Management's initial focus with Ofirmev was to gain acceptance in as many formularies as possible. In the US, 750 hospitals account for 50% of the IV analgesic market and 1,850 accounts for 80%. The company gave guidance early in 2011 that they expected 800 to 1,000 hospitals to have added Ofirmev to their formularies by the end of the year. They actually far surpassed this guidance as Ofirmev was on formulary in 1,580 hospitals by year end.
There have been several disappointing launches of hospital-based products from other companies in recent years and in each case there was difficulty getting the product on the formulary. Clearly this is not the case with Ofirmev. Rather it has been an issue with getting broad usage in the hospital after formulary acceptance. In its latest corporate presentation, Cadence published informative data in a recent company presentation that showed monthly sales of vials of Ofirmev. These indicate to me that the company is broadening prescribing within the hospital and that the product is now beginning to gain traction.
Ofirmev Projections for 2012
I have reproduced this data on monthly vial sales for 2011 in the following table shown below. Using the price of $10.00 per vial, it is then possible to estimate monthly sales:
Number of Vials (000) Sequential Increase Sales (000) @ $10.00 per vial
2011 Month Cumulative % # of vials Month Cumulative Sequential
January 3.2 3.2 0% 3.2 $32 $32 $32
February 9.0 12.2 185% 5.9 $90 $122 $59
March 20.9 33.1 132% 11.9 $209 $331 $119
April 34.5 67.6 65% 13.5 $345 $676 $135
May 55.2 122.7 60% 20.7 $552 $1,227 $207
June 80.8 203.5 46% 25.6 $808 $2,035 $256
July 95.1 298.6 18% 14.3 $951 $2,986 $143
August 121.4 420.0 28% 26.3 $1,214 $4,200 $263
September 140.6 560.6 16% 19.2 $1,406 $5,606 $192
October 169.2 729.9 20% 28.6 $1,692 $7,299 $286
November 191.3 921.1 13% 22.0 $1,913 $9,211 $220
December 226.9 1,148.0 19% 35.6 $2,269 $11,480 $356
I interpret this data as being quite encouraging. The first thing that catches my attention is that, since July, there has been a consistent sequential monthly increase in vials sold of about 15% to 20%. Also of note is that the annualized run rate based on sales in December was about $29 million.
Projecting Future Sales of Ofirmev
This data release gives an analyst much more detail than is usually the case. Estimates of vial growth for each month of 2012 can be made based on estimates of sequential monthly growth. To do this, I use as a starting point the 15% to 20% sequential growth seen in the last half of 2011 and judge whether it will increase, decrease or stay at the same level.
In the recent corporate presentation available on the Cadence website, management shows a number of metrics that affect sequential growth. These include hospital formulary acceptance, growth in new customers, average order frequency, increasing order size and estimated share of surgical procedures. Each of these metrics is in a strong uptrend that might be interpreted as acceleration of vial sales growth.
I have looked at the potential for vial sales and Ofirmev revenues in 2012 based on a number of scenarios for monthly sequential sales growth. I am using as my base case an estimate of sequential monthly sales increases of 10% for each month in 2012. My inclination is that this may prove to be conservative. Based on this assumption, I have come up with the following monthly estimates:
2012 Estmates Assuming 10% Monthly Sequential Increases in Vial Sales
Number of Vials (000) Sequential Increase Sales (000) @ $10.00 per vial
Month Cumulative % # of vials Month Cumulative Sequential
January 250 250 10.0% 23 $2,496 $2,496 $227
February 275 524 10.0% 25 $2,745 $5,241 $250
March 302 826 10.0% 27 $3,020 $8,261 $275
April 332 1,158 10.0% 30 $3,322 $11,583 $302
May 365 1,524 10.0% 33 $3,654 $15,238 $332
June 402 1,926 10.0% 37 $4,020 $19,257 $365
July 442 2,368 10.0% 40 $4,422 $23,679 $402
August 486 2,854 10.0% 44 $4,864 $28,543 $442
September 535 3,389 10.0% 49 $5,350 $33,893 $486
October 589 3,978 10.0% 54 $5,885 $39,778 $535
November 647 4,625 10.0% 59 $6,474 $46,252 $589
December 712 5,337 10.0% 65 $7,121 $53,373 $647
This base case assumption predicts that vial sales in 2012 will increase by nearly fivefold to 5.3 million and sales will increase to $53.4 million up from $11.5 million in 2011. I am inclined to think that the 10% estimate for sequential monthly increases in vial sales is conservative, but for the time being I am going with this as my base case.
I have used the same methodology shown above to come up with some "what if" scenarios for different assumptions. With a 5% sequential monthly increase, my 2012 sales estimate would be $40.7 million, with 15%, $81.4 million and with 20% $115.9 million. Let's see how the year unfolds.
The Outlook for 2013 and 2014
I think that the law of large numbers will cause a slowing in the sales trajectory in 2013 and 2014, but I would expect it to continue to be quite impressive. I think that the company can show a respectable profit in 2014 of $0.73.
http://seekingalpha.com/article/322004-cadence-s-ofirmev-launch-is-gaining-traction?source=yahoo
surf1944
13 년 전
Cadence Pharmaceuticals Announces Completion of Public Offering of Common Stock, Including Full Exercise of Over-Allotment Option by Underwriters
PR NewswirePress Release: Cadence Pharmaceuticals, Inc. – Tue, Nov 22, 2011 7:49 PM EST
SAN DIEGO , Nov. 22, 2011 /PRNewswire/ -- Cadence Pharmaceuticals, Inc. (Nasdaq: CADX - News) today announced the closing of its previously announced public offering of 21,800,000 shares of its common stock, including 2,800,000 shares sold pursuant to the full exercise of an over-allotment option previously granted to the underwriters, at a public offering price of $3.75 per share. The net proceeds from the offering, after deducting the underwriting discounts and commissions and estimated offering expenses, are expected to be approximately $77.4 million .
Deutsche Bank Securities Inc. acted as sole book-running manager, Leerink Swann LLC acted as co-lead manager and Cowen and Company, LLC acted as co-manager for the offering.
The securities described above were offered by Cadence pursuant to a shelf registration statement that had been previously filed with, and declared effective by, the Securities and Exchange Commission (the "SEC"). A final prospectus supplement related to the offering has been filed with the SEC and is available on the SEC's website at http://www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained from Deutsche Bank Securities Inc., Attn: Prospectus Department, 100 Plaza One, Floor 2, Jersey City, NJ 07311-3901, or by telephone at: (800) 503-4611, or by email at: prospectus.cpdg@db.com. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
surf1944
13 년 전
Cadence: Not Unduly Concerned About ANDA Filing Against Ofirmev
Investment Opinion
I believe that the Ofirmev approval is a game changer that can propel Cadence (CADX) into a successful, medium tier, earnings driven bio-pharmaceutical company. While I am recommending purchase of Cadence, I think that it important for investors to understand the risks and uncertainties of the investment outlook. This note discusses the patent challenge to Ofirmev that was revealed on June 30, 2011. It is inevitable that Ofirmev will be genericized, the question is when. I think the timing for the first generic launch is most likely to be in early 2018.
Some investors believe that the current valuation of Cadence accurately discounts the value of Ofirmev. However, I think that valuing the company only on the basis of Ofirmev’s potential is not correct; it is only part of the investment equation. Ofirmev may enable Cadence to build a powerful hospital sales force that will allow the company to acquire and co-market other products. I would not be surprised to see the company add a new important product each year. I also think that erosion of sales after generics come to market may be less onerous for an intravenous product like Ofirmev than what is usually seen for oral drugs. Instead of a precipitous drop immediately after the launch of a generic, I would look for a more orderly, measured decline.
The nearly 10 years of marketing experience with Perfalgan (Ofirmev) in Europe provides a good roadmap for estimating sales. Extrapolating market penetration seen in Europe and taking into account a higher U.S. price results in potential sales of $325 million to $500 million. Street expectations for Ofirmev sales in 2011 are about $25 million and for 2012 the average is about $125 million.
ANDA Filed Against Ofirmev
On June 30, the FDA website revealed that an as yet unidentified generic company filed an ANDA against Ofirmev. Although this was a little quicker than expected coming just five months after launch, most analysts and investors were expecting the filing. The news was taken in stride as the stock price increased on the next trading day. It has become routine for generics to file quickly after a launch in order to claim the coveted 180 days of exclusivity accorded to the first generic company to file against a patent. Investors have come to expect this.
The intellectual property protection (patents) for Cadence’s Ofirmev (intravenous acetaminophen) is not based on composition of matter claims which are the most rigorous of patents. The key inventions underlying and allowing for the commercialization of Ofirmev were developing a viable formulation and stable manufacturing process. Acetaminophen has been on the market for more than 60 years as an oral product. However, attempts to produce an intravenous formulation repeatedly failed because acetaminophen readily breaks down when exposed to oxygen or water
Ofirmev is protected by two key patents. Management believes that the strongest patent is a formulation patent that expires in August of 2017. However, a pediatric extension adds six months of exclusivity until February 2018. There is also a process patent that extends until June of 2001. It was not disclosed which patent the generic company is challenging, but it is almost certainly the formulation patent and possibly both.
Cadence and Bristol-Myers (BMY) maintain that Ofirmev’s patents are so broad that it would be very difficult for a generic company to around. They believe that the formulation patent covers all excipients needed to produce the Ofirmev formulation. They maintain that in order to bring a generic form of intravenous acetaminophen to market without infringing their patents, the generic company would have to develop an entirely new formulation and manufacturing process.
The Bristol-Myers/Cadence process is the only one that has ever resulted in a stable intravenous formulation of acetaminophen. It seems unlikely that a generic firm has suddenly discovered an entirely new formulation and manufacturing process that doesn’t infringe when others have failed for decades. Had anyone else identified a suitable process for stabilizing IV acetaminophen, they would have used that technology to create an intravenous acetaminophen long ago.
Possible Scenarios
I believe that the probability that this generic challenge will infringe the BMY/CADX patents and block its introduction is very high. However, nothing is for sure when it comes to patent litigation and I have laid out a number of possible scenarios that could unfold. The Waxman Hatch Act governs the challenge of a patent and it specifies that Cadence has 45 days to sue the generic firm for patent infringement. Following this, the generic company is barred from launching a product for 30 months or until a trial concludes, whichever is shorter. It is almost always the case that a trial takes longer to conclude.
Worst case scenario is an “at risk” launch:
A generic company could choose to launch its generic after 30 months and before the case is decided at trial. This would be January of 2014. However, if the generic company then lost the case, it would be subject to treble damages and this could be several hundreds of million dollars in the case of Ofirmev.
Next to worst case:
It is unlikely that a generic company would go with an “at risk” launch because of the apparent strength of the Ofirmev patent position. If it waited for the conclusion of the trial before launching and assuming that it won the trial, it might be able to launch sometime in mid-2014 to mid-2015. I don’t think Cadence would lose a trial, but one can never be sure.
Most likely case:
If the formulation patent is as solid as management believes, there would be no launch until February of 2018.
Best case:
If the process patent also holds up, there would be no generic launch until June of 2021.
In between case:
There is another possibility. Cadence and the as yet undetermined generic filer could agree to a settlement. Both companies would agree to a time when the generic product could be brought to market. I think that this would be no earlier than mid-2016 and no later than mid-2017 although this is a subjective judgment on my part.
Here is how I rank the probabilities of each event occurring.
Scenarios
Timing of generic launch
Probability
At risk launch
January, 2014
1%
Generic company wins at trial
Mid 2014 to mid-2015
4%
Settlement is reached
Mid 2016 to mid-2017
35%
Formulation patent is upheld
February 2018
55%
Process patent is upheld
June 2021
5%
Injectable Generic Launches Are Different From Oral Dosage Forms
Investors have come to expect rapid sales declines when a generic to an oral dosage form comes to market. It is frequently the case that a brand name drug loses 90% of its sales volume in 18 months. There is reason to believe that this could be different for an injectable product like Ofirmev.
For another company to manufacture this product, they would need specialized equipment beyond what they would already have in place. Manufacturing capacity for injectables is more difficult to find than with solid oral dosage forms because of its greater complexity. Worldwide, the capacity for injectables is dramatically less than for solid dosage forms. Generally it takes several years for capacity to be built up and for generics to gain significant share. Moreover, the two largest suppliers of intravenous acetaminophen, Baxter (BAX) and Bristol-Myers Squibb, are barred from providing product to a generic company in the U.S. Because of these factors, generic penetration post entry of the first generic should be much slower than with solids; there is not likely to be 90% erosion in the first year and one half. As a guess, sales might erode at a 20% to 30% rate over the first three years.
Disclosure: I am long CADX.
http://seekingalpha.com/article/277935-cadence-not-unduly-concerned-about-anda-filing-against-ofirmev?source=yahoo
surf1944
13 년 전
Cadence Pharmaceuticals: Encouraging Formulary Acceptance for Ofirmev
Overview and Stock Opinion
I continue to recommend purchase of Cadence (CADX) based on trends seen in the 1Q, 2011 period. The details of my recommendation are outlined in my report of March 13, 2011.
I believe that Ofirmev meets a major unmet need for an alternative to narcotics and NSAIDs in the intravenous analgesic market. There has been very little innovation in this area and hospitals are under intense pressure to reduce narcotics use without sacrificing pain relief.
The company just reported 1Q, 2011 results in which sales of Ofirmev were $350,000 based on 34,000 doses sold. The company is now 15 weeks into the launch and at this point, investors are focusing on formulary acceptance to gauge potential success. More meaningful sales should begin in 3Q and 4Q of 2011.
I do not have access to all of the Street estimates for Ofirmev sales and in the numbers I cite below there is some chance that the numbers may not accurately represent the range. However, my best judgment is that they are reasonably reflective of what investors are looking for.
Street expectations for 2Q, 2011 sales of Ofirmev range from $1.5 million to $2.5 million. This is probably a reasonable expectation in my opinion, but the numbers aren't that meaningful.
The full year numbers for 2011 will be more meaningful. I am looking for sales of $25 million. Street estimates range from $13 million to $35 million.
Expectations for 2012 are $110 to $142 million. I am at $125 million.
Peak sales estimates range from $400 to $500 million. I think there is a case to be made that this is too low.
Formulary Acceptance Continues to Be Excellent
A new paradigm that has emerged in biotechnology investing over the last few years has been slow formulary acceptance and resultant disappointment in introductory sales. The recent experience with Cumberland's (CPIX) Caldolor, Savient's (SVNT) Krystexxa, and NeurogesX's (NGSX) Qutenza are examples.
Cadence stands apart with the rapid formulary acceptance experienced by Ofirmev. As of April 30, 2011, the company in just 15 weeks of marketing has obtained formulary acceptance at 675 hospitals representing over 30% of the targeted market opportunity. This has caused the company to increase guidance on formulary acceptance from 800 to 1200 hospitals by the end of the year. This would represent 50% of the total US intravenous analgesic market opportunity for Ofirmev.
It takes about six to eight weeks to take place from the time Ofirmev is placed on formulary until physicians begin to use it. This is the due to working out logistics to supply the product to the hospital at places where it is needed.
In 75% of the 675 formularies now offering Ofirmev, it has been added on an unrestricted or minimally restricted basis. Management reported that just under 600 hospitals are actually stocking the product. The company's success rate for acceptance after the first presentation is about 90%. There are several hundred meetings scheduled in the immediate future.
CEO Ted Schroeder stated that in past product launches with which he has been involved, he would have been happy to have had 675 meetings scheduled at this point in the launch. He is very encouraged by already being in 675 formularies.
Comparing Ofirmev to Launch of Caldolor
Caldolor is an injectable formulation of the NSAID ibuprofen that was approved in June of 2009 and has been on the market for about 18 months. It is indicated for the same patient audience as Ofirmev. As an NSAID, it has a black box warning for cardiovascular and gastrointestinal side effects that is carried by all members of this class of drugs.
Caldolor has struggled mightily to find a foothold in the market and has had difficulty in gaining formulary acceptance. It was on 300 formularies at the end of 3Q, 2010, 375 at 4Q, 2010 and 400 at 1Q, 2011. Sales are annualizing at somewhere between $0.5 and $1.0 million per year.
This brings home how striking the rate of formulary acceptance has been for Ofirmev.
Bringing on Second Manufacturing Facility
The FDA approved a supplemental NDA in March 2011 for a second manufacturing facility in Anagni Italy. This is the plant that produces intravenous acetaminophen for Bristol-Myers in Europe. Having a second manufacturing facility is important for adding capacity and geographic diversity. Reliance on one manufacturing facility carries significant risk from natural or manmade disasters. Cadence's first facility that is owned by Baxter is located in Cleveland, Mississippi. Imagine if the tornados that just ravaged the south had destroyed this plant. Having backup is important.
The capacity of the Baxter manufacturing facility is 15 million units per year which translates into end sales of $158 million. The specific capacity of Anagni was not stated other than to say that with Baxter and Anagni, Cadence now has far more capacity than will be needed in the next couple of years,
Not Yet Exercising Option to Acquire Incline Therapeutics
Cadence elected not to exercise its just expired first option to acquire Incline Therapeutics for up to $135 million. Management stated that it wanted to focus on the Ofirmev launch. Cadence continues to be very interested in Incline and expects that company to file a sNDA for its Ionsys fentanyl transdermal system in late 2012 or early 2013. Cadence expressed continued interest in acquiring Incline at a price of up to $228 million during the second option period which extends until 30 days after Incline files an IPO or December 2013.
Financials
Cadence reported a cash position of $109 million at 1Q, 2011. I am estimating a cash burn rate of $20.3 million in 2Q, 2011, $17.1 million in 3Q, 2011 and $14.9 million in 4Q, 2011. This would result in a year end cash position of $57 million. My projections indicate that the company may be close to positive cash flow for full year 2012. The company has adequate cash to take the company into positive cash flow by my projections without an equity raise.
Terumo Alliance
Cadence received a $5.3 million milestone payment for Terumo in April for rights to commercialize intravenous acetaminophen in Japan.
Disclosure: I am long CADX.
http://seekingalpha.com/article/268401-cadence-pharmaceuticals-encouraging-formulary-acceptance-for-ofirmev?source=yahoo
mlkrborn
14 년 전
GOOD ARTICLE BY sHEFF's STATION:
Cadence: Patient Investors Should Watch Short Sellers Before FDA Decision on Thursday
5 comments | by: Sheff Station November 02, 2010 | about: AVNR / CADX / POZN
Cadence has a PDUFA [Prescription Drug User Fee Act] date of November 4th for its drug Ofirmev. Investors are anticipating it will receive approval. Ofirmev (intravenous acetaminophen) is a new drug formulation in development for the treatment of acute pain and fever in adults and children. If approved, it would be the the only injectable non-opiod, non-NSAID pain product available in the U.S.
Ofirmed received a complete response letter from the FDA in 2010 and stated in the complete response letter that:
The FDA only indicated that deficiencies were observed during the FDA’s facility inspection of Cadence’s third party manufacturer, which was completed on Feb 5th, 2010. The FDA did not site any safety or efficacy issues, nor did it request any additional studies to be conducted prior to approval.
It is widely expected that the FDA will approve Ofirmev barring any setbacks with regards to the manufacturing facility.
What has happened in the past 3 months is that a large short position in CADX has been accrued. With 48 million shares in the float and 50 million outstanding, there is a short position of almost 10 million shares. That would be a little over 20% of the float.
Avanir (AVNR), which received an FDA approval on Friday (Oct 30th), had 26% of its float shorted before a bear raid occurred in the final 90 minutes of trading action. This took AVNR shares down from $2.90 to a low of $1.31. The stock traded under $2.60 to close the day at $2.43. A few hours later Avanir's drug, Nuedexta, was approved for pseudobulbar affect and the stock traded at over $5 in after-hours trading.
The same thing happened with POZEN (POZN), back in April, on the day of Pozen's PDUFA date, and also within a few hours left in the trading day. That stock traded over $11 when the market-makers dropped it under $5 that day as well. They then moved it back up to close it over $10 for the day. A lot of stop losses were triggered and short covering took place in both instances with POZN and AVNR.
What investors need to look at is the potential that CADX could possibly be taken down similar to the other stocks I mentioned above because of its large short position going into the approval date. The short position has increased 2 million shares since July as it has moved higher into the decision date. The 10-day average volume has only been about 433,000 shares, so any significant volume (outside of a bear raid) could cause some short covering and cause the stock to appreciate in share price. Based on the short position it would take approximately 22 days to cover. The volatility could create good fortune for opportunistic investors who have potentially low bids in an effort to acquire some lower cost shares.
In the remaining days until an approval decision is given, the price action in CADX will be of special interest to investors. In September, Wedbush Securities started coverage on CADX with an outperform rating and a $12 price target. Investors will be watching Cadence Pharmaceutical closely in the days to come as a decision either way is imminent. Thursday the 4th of November is fast approaching.
Disclosure: Long CADX but position could change at any time
source : Alpha
mlkrborn
14 년 전
Cadence Wins FDA Approval for Painkiller, Now Just Has to Sell It
| by: EP Vantage November 04, 2010 | about: CADX
The painful wait is over for Cadence Pharmaceuticals (CADX). The FDA has approved its intravenous acetaminophen formulation Ofirmev for post-surgical patients, allowing the California company to declare it will launch in early 2011.
After three months of steady increases, Cadence shares were down 13% to $7.80 in early trading Wednesday as an approval that was widely expected finally came through (FDA delay leaves Cadence tapping feet once again, February 12, 2010). Investors may be anticipating that adoption of the analgesic will prove challenging and expect another round of fundraising in 2011. As such, it could be a while before the hospital specialty products group realizes the $1bn in value that analysts believe Ofirmev represents.
A familiar face
Marketed in Europe as Perfalgan by Bristol-Myers Squibb (BMY), Ofirmev is intended as a pain-relief alternative to opioids and non-steroidal anti-inflammatory drugs (NSAIDs) in treating pain and fever in hospitalized patients. With safety concerns about both classes of competing therapies, Cadence executives hope for widespread adoption in hospital formularies.
In a call with investors, Cadence executives said Ofirmev was approved with no requirements of a risk evaluation and mitigation strategy or a black box safety warning on the product insert, although the label does caution against use in patients with liver disease or impairment. The relatively clean label should give the new pain therapy a key marketing advantage.
The relatively well-understood mode of action and safety profile should also give marketing leverage, as acetaminophen has been prescribed for pain relief for more than 50 years.
In Europe, Bristol-Myers Squibb sold 90 million vials of Perfalgan in 2008, and chief commercial officer Scott Byrd said Cadence believes the US market to be of a similar size. The group plans to sell Ofirmev at $8-$10 a vial, a price that implies sales pushing the blockbuster threshold, although few analysts are this confident just yet - consensus for 2016 sits at $512m, according to EvaluatePharma.
Revenue needs
Revenue at this level will come in handy for Cadence. For one, they owe Bristol-Myers Squibb a $15m milestone upon regulatory approval. For another, they plan on a pediatric trial in children younger than 2 to help extend Ofirmev’s patent protection.
A third consideration is the launch curve and the costs of its sales team, which will number 150 to help cover 1,800 of the 5,000 hospitals in the US. At an estimated cost, including sales support, of $300,000 a year per sales representative, the addition of sales staff plus these other expenses will quickly burn through cash reserves, which amounted to $68.5m on June 30.
Given that adoption of Ofirmev will be dependent on approval of hospital formulary committees – a process that can take six to nine months, with larger academic medical centers taking relatively longer and community hospitals taking relatively shorter amounts of time – Ofirmev’s growth curve may not resemble that of a typical pharmaceutical. Persuading the physicians who sit on hospital formulary committees to change post-surgical protocols may be one of the biggest challenges the pain reliever faces.
Ambition
A fourth consideration is Cadence’s ambition to build a franchise of specialty hospital products. Last June, it looked to expand its portfolio when it signed an option to purchase privately held Incline Therapeutics and participated in Incline’s series A funding round.
Under the agreement Cadence can purchase Incline, which is developing a transdermal system for delivering small doses of the opioid fentanyl to hospitalized patients, for $135m in the first 12 months, with the price rising on successive milestones, to reach $292m on FDA approval.
It will be years before Ofirmev generates enough cash to fund a purchase of this size - Cadence's market cap today was just shy of $400m - but its approval does give the company a strategic rationale to do so; its sales force would have more products to sell. On top of this, in the investor call Cadence chief executive Theodore Schroeder said he is also looking at additional opportunities in hospital-focused product lines.
Concern that they will be asked to fund the sizable Incline acquisition and possibly further empire building probably has a lot to do with investors' flight Wednesday. Fear of the challenges ahead and simply selling on the news no doubt also contributed.
Still, FDA approval is an important milestone for any product. Cadence now has to prove the product's value, an equally challenging journey.
About the author: EP Vantage EP Vantage is a forward-looking comment and analysis service tailored to the needs of pharma and finance professionals, focusing on the events that will define the future of companies, products and therapy areas. Written by experienced journalists, EP Vantage provides timely financial analysis... More
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