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In The Spotlight: Pozen Inc
3/22/2010 11:27 AM ET
Why it is profiled ? Nearing FDA decision date
http://www.rttnews.com/ArticleView.aspx?Id=1247249&pageNum=2

Pozen Inc. (POZN) is a pharmaceutical company, focused on developing novel pharmacologic agents by combining existing drug therapies primarily for pain and pain-related conditions. Pozen is a pioneer in the concept of outsourcing drug development and this model has allowed the company to remain self-funded - committing all its resources for new products while avoiding high costs associated with basic research.

The company has one approved product in the market - Treximet, for the acute treatment of migraine attacks, with or without aura, in adults. Treximet is formulated with Pozen's patented technology of combining a triptan with a non-steroidal anti-inflammatory drug and GlaxoSmithKline plc.'s (GSK) RT Technology. The drug is commercialized in the U.S. by GlaxoSmithKline and Pozen receives royalties based on the net sales of Treximet.

Treximet was approved by the FDA for migraine in April 2008. Net sales of Treximet totaled $86.1 million for GlaxoSmithKline in 2009, generating royalty revenue of $4.3 million for Pozen. Starting January 2010, the royalty rate for Treximet has been increased to 18% from 5%.

Pozen's most-advanced drug under development in the pipeline is Vimovo for the treatment of osteoarthritis, rheumatoid arthritis, and ankylosing spondylitis in patients who are at risk of developing NSAID-associated gastric ulcers. Vimovo is a combination of 500mg enteric coated naproxen and 20mg immediate release esomeprazole.

Vimovo, which is developed in partnership with AstraZeneca plc (AZN), is under FDA review and the regulatory agency is expected to make a decision by April 30 based on a standard 10-month review. The New Drug Application for Vimovo was submitted on June 30, 2009. Pozen's partner AstraZeneca is seeking approval of Vimovo in the European Union too.

Pozen, which has thus far received $80 million in upfront and milestone payments from AstraZeneca, is eligible to earn $20 million in milestone payment if Vimovo wins regulatory approval in the U.S. and another $25 million if the drugs gets approved outside of the U.S. Based on achievement of certain sales thresholds, Pozen is also entitled to receive sales performance milestones of $260 million.

According to the World Health Organization, nearly 27 million U.S. residents and 140 million people worldwide suffer from osteoarthritis, a disease commonly treated with Nonsteroidal anti-inflammatory drugs or NSAIDs. Although NSAIDs can relieve pain and reduce inflammation, half of osteoarthritis patients on chronic NSAID therapy are at risk of developing NSAID-associated gastric ulcers.

A recent study published in the Therapeutics and Clinical Risk Management reveals that "major adverse gastrointestinal events attributed to NSAIDs are responsible for over 100,000 hospitalizations, $2 billion in healthcare costs, and 17,000 deaths in the U.S each year."

Though COX-2 selective NSAIDs - Vioxx and Bextra were supposed to be better NSAIDs with low GI (gastrointestinal) risk, they were found to be associated with increased risk of heart disease and stroke over time, resulting in the withdrawal of the drugs from the market.

In the wake of cardiovascular safety concerns regarding the COX-2 selective NSAIDs, many physicians are now recommending traditional non-selective NSAIDs with gastroprotective co-therapy. In the two phase III pivotal trials of VIMOVO conducted under a special protocol assessment, patients taking Vimovo showed a decrease in the incidence of NSAID-associated ulcers.

With an unmet medical need for safer NSAIDs, Vimovo, which has a low-risk GI damage, becomes a potentially important treatment option.

In 2009, approximately 89 million anti-arthritis NSAID prescriptions were dispensed for the management of pain. Prescription sales of anti-arthritis NSAIDs in the U.S. in 2009 were $2.8 billion.

Pozen's pipeline also includes a "safer aspirin" franchise of product candidates dubbed PA product platform. The PA family of product candidates is intended to significantly reduce GI ulcers and other GI complications compared to taking aspirin alone in treatment of cardiovascular disease. The company is also evaluating PA products in the secondary prevention of colorectal cancer and pain.

The advanced investigational drug under the PA product platform is PA32540 indicated for use for the secondary prevention of cardiovascular disease. Pozen initiated late-stage studies of PA32540 last October.

Aspirin is considered the gold standard in prevention of secondary cardiovascular disease. According to reports, more than 50 million US adults take aspirin regularly for long-term prevention of cardiovascular disease.

Aspirin is also known to prevent colorectal cancer. Since there are concerns that Aspirin's side effects, mainly bleeding ulcers, might outweigh the benefits in many healthy or older people, there is an urgent need for a safer form of Aspirin and Pozen's PA products are designed to address this unmet need.

Other numbers: At the end of 2009, Pozen had zero debt, total cash of over $46 million and accumulated deficit of about $140.0 million.

Shares of Pozen have largely been confined in a broad range of $5.24 and $8.05 since late 2008. The stock touched a 5-month high Monday and is currently trading around $7.50.