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Our tax dollars at work. Wonderful game the FDA plays.
FDA: Please amend your application.
Braeburn: Here it is.
FDA: Oh, you've amended your application. We need three more months.
The odds of approval just dropped to 50-50 in my book. They need three months to go over the new REMS? Maybe. Or maybe they need three months for the heat on opioids to die down and then issue a CRL.
I am long and strong come hell or high water, but I have to admit that with each day that passes, I get a little less confident. Not based on probuphine's efficacy or safety, just the irrationality of the FDA.
The end points of the trials submitted with the 2013 were pre-agreed upon with the FDA. They met the endpoints, and the FDA changed the rules and required more...without any more justification than "they felt like it." I remember a lot of news headlines calling it a "mugging" or "The FDA is Unreasonable."
I really don't like the vote on the FDA Commissioner is occurring on February 22nd. If he is approved, there is no "heat" on him to approve probuphine or really do anything about the opioid crisis. But he always has an incentive to make big pharma happy.
I'm kind of relieved the topic of the conference is limited to opioids for chronic pain...I wouldn't want the FDA to have an excuse to delay on the opioid abuse indication.
Really seems silly that Braeburn will have to go through Phase III's to prove buprenorphine delivered through an implant (proven to be safe and effective) works for chronic pain, when buprenorphine has been approved orally and sublingually for chronic pain.
At the JP Morgan conference, Braeburn's materials projected approval for chronic pain in 3Q 2018. Assuming they got priority review (6 months), that would mean the Phase IIIs would have to end by 4Q 2017 at the latest (probably 3Q). Which means Phase III's would probably need to begin recruiting in 3Q 2016...
They have a contract manufacturer for probuphine. The manufacturer was inspected by the FDA with the 2013 NDA, and there were no issues raised in the CRL. So I expect the contract manufacturer has once again been inspected by the FDA.
I know the market is down, and biotechs are out of vogue, but I think people will be surprised with how Titan runs if probuphine is approved. Not immediately after approval, because I think there will be a lot of shorting. But the demand for shares will be there. Heck, PBS states that 4.6 million people watch Frontline each week, and describes the viewers as “affluent and well-educated” and “more likely to hold executive or professional employment positions than the general population and the average public television viewer.” If probuphine is approved within a week of the Frontline episode, I would think 1 in a 1,000 Frontline viewers might purchase TTNP stock based on the program…at $5k apiece that would be $23.5 million in new purchases. That’s just retail…let’s not forget most biotechs on Nasdaq have a 50-75% institutional ownership (Titan currently has less than 1%).
Usually, sales take awhile to ramp up, but at the Ad Comm Braeburn indicated in plans to qualify 1,500 physicians to perform the probuphine procedure within the first six weeks of launch. So if each physician performs just one new procedure a month, that would mean 27,000 total procedures a year (assuming the patients in the first half of the year continued probuphine for the second half of the year). At $2,000 a pop, that’s $54.0 million in revenue a year, with a royalty to Titan of at least $8.1 million (15%). Two patients a month, and Titan gets $16.1 million. Or a patient every week, Titan gets $32.2 million.
The new DATA 2000 regulations are not being accounted for because they haven’t been published. But if implants are exempted for the 30 patient prescription limit, I think it’s only logical that physicians will be incentivized to use the implant whenever feasible to “save room” for higher dosage patients needing sublingual formulations.
I fully expect Braeburn to commence Phase III trials for chronic pain in 2016, probably by the end of the third quarter.
An EU deal is likely in 2016 as well.
A lot of good things to look forward to.
Airing just in time for decision week (February 23rd) on a PBS station near you...
http://www.pbs.org/wgbh/frontline/film/chasing-heroin/
Let's agree to disagree. I actually wish I could see things as you do. But I firmly believe there is something behind the FDA's actions with opioids-approving nearly anything big pharma submits, and slapping Titan around for a abuse prevention formulation at the Ad Comm (for a drug that showed non-inferiority in 2013!)-that can't be attributed to "playing by the book."
There are those with a vested interest in the abuse of opioids continuing to grow. Just saying...
Point taken. But how many drugs have two positive Ad Comms? If there were a case for approval ahead of schedule, I think this would be it.
How many Ad Comm's involve the FDA dedicating page after page of the briefing document describing how, although the drug is non-inferior in all possible interpretations of the data and actually superior in 3 of 4 interpretations, it "should work better." Just months after they approve, by the way, opioids for teenagers.
Just coincidence? After awhile, you build up so many coincidences and it doesn't seem that coincidental.
It could have been approved by now if they wanted to approve it. They have not approved. Why? The answer is not in the science. But I believe some of the articles Truth has posted point to the answer...the FDA is crooked and this is a rigged game.
Our hope is that the FDA doesn't want to spend the political capital necessary to issue a CRL given the governmental and public attention to the opioid crisis. And having Braeburn backing probuphine helps a lot. But make no mistake, without that public attention and Braeburn, a CRL would have been issued already. Too much money at stake for big pharma.
That is why the price isn't climbing. The market knows the FDA for what it is.
Well said. For those unfortunate families trying to cope with that insidious, formless, unfathomable disease, I feel nothing but compassion. Unless you've dealt with it firsthand, it's impossible to understand the senselessness of the disease. Our strengths as humans--logic and willpower--are helpless before it.
For the FDA, I feel nothing but disgust. Yes, probuphine should have been approved in 2013. It only wasn't because the FDA moved to goal posts.
Now, in 2016, with a clinical trial showing superiority to SL buprenorphine under all but the most negatively drawn evaluation criteria (and even then non-inferiority admitted by the FDA), probuphine remains unapproved. Not for efficacy or safety, but because, in my belief, the FDA is scrambling to find some sort of condition to approval (a phase IV, a labeling change) that will prove they were right not to approve probuphine in 2013.
They are unable to admit a mistake and do the right thingIt is better in the FDA's eyes that addicts die than they admit a mistake.
I agree. I don't think their analyst knows what she's talking about, and doesn't know Titan very well. Zachs got burned with a positive recommendation the last time around, and so they are not going to stick their neck out.
Let's just say the exercise of going through Zach's assumptions was interesting...they are very, very conservative.
Zachs 2017 Numbers
Zach’s estimate is $21.3 million in probuphine royalty income. It gets complicated, because all of 2016 revenue is based on “new sales,” but going forward you have to factor in a percentage for how many prior sales will continue treatment after six months. I’ve heard something like 90% of trial participants would continue with probuphine, but to be conservative let’s assume 20% drop out after each treatment cycle.
So, first we have to deal with reoccurring sales from 2016. There should be 3.28 million in royalty income in the 1H of 2017 (80% of 4.1 million), and $2.62 million in royalty income in the 2H of 2016 (80% of $3.28 million), for a total of $5.9 million in royalty revenue from reoccurring sales from 2016.
That leaves $15.4 in “new” 2017 royalty income, which roughly speaking means $100 million in sales. That could be accomplished with (a) $33 million in new sales in 1H 2017, with a royalty of $4.95 million, and other $26.4 million in reoccurring sales (80%) in the 2H2017 with $3.95 million in royalties, plus (b) $44 million in new sales in the second half of 2017 with a royalty of $6.6 million.
Back to our 1,500 trained doctors (assuming that number doesn’t increase), $33 million in new sales for 1H of 2017 would mean 15,000 new probuphine patients. So each doctor is assumed in treat 10 new patients over 6 months. For the 2H 2017, the number goes up to 20,000 new patients, with each doctor treating 13.3 new patients in the second half of 2017 (about two a month). I’ll leave it to you to determine whether that is overly conservative.
Zachs has not included any milestone revenue, but assuming Braeburn meets its published expectations and files a sNDA for probuphine for chronic pain in 2017, there is a milestone due. There’s 35 million total in potential regulatory milestones under the license agreement (other than the 15 million on probuphine approval for opioid abuse), so I would assume Titan would get $10 million of that upon filing the chronic pain NDA. I also assume EU approval would take a year from filing in 2016, and they’d get another $5 million upon EU approval in 2017. So total royalty ($21.3) and milestone ($20.0) income should be $41.3, less expenses of $15.0 (Phase II for ropinrole) for income of $26.3, or $1.05 per share assuming 25 million outstanding at that point in time.
Zachs 2016 Numbers
Zach’s estimate is $19.1 million in revenue, consisting of a $15.0 million milestone from Braeburn upon FDA approval of probuphine for opioid addiction, and $4.1 in royalty income from Braeburn for probuphine sales.
Titan receives a tiered royalty from the “mid-teens to the low twenties”, so my conservative assumption is the initial royalty percentage equals 15%. So a royalty of $4.1 million means about $27 million in sales in 2016. The numbers I have seen indicate a 6 month treatment of probuphine will sell for about $2,200, which means Zachs believes around 12,272 people will buy probuphine in 2016.
I have also seen (but not confirmed) that Braeburn wants to train 1,500 doctors to administer probuphine. Assuming product launch on July 1, 2016, that would mean each trained doctor would average about 8.18 probuphine procedures over six months, or about 1.36 per month.
Zachs is not factoring in upfront license payments that would be part of outlicensing probuphine to EU countries or elsewhere. I think that will happen, and add about $5 million in revenue.
So total 2016 revenue should be about $24.1 million, with expenses at $10.1 million (the Phase I for ropinrole won’t cost much), for profit of $14 million, which translates to an EPS of $0.66 assuming 21 million shares outstanding.
And yes, there may be a secondary offering, but let’s remember we are a Nasdaq company now. Nasdaq rules prevent over 20% of outstanding shares being issued without shareholder approval. And, although we might be diluted up to 20%, chances are it will bring in at least over $30 million which will shore up the balance sheet and bring more institutional interest.
I had a gut instinct that approval would occur this week, which worked as well as my gut instinct usually does. I think the FDA is going to use every day they can, and we won't see anything positive or negative until after the 27th.
Issuing a press release is one thing, but changing the culture at an agency is quite another and the FDA doesn't move quickly!
Does anyone know how post-marketing study requirements are handled by the FDA. Assuming a Phase IV will be required to determine long-term safety, does the FDA discuss that with the sponsor pre-approval? Or does it issue an "approvable" letter with a Phase IV condition and then approve once the sponsor agrees to the marketing study?
Looks like the local Texas paper just used an old probuphine story on February 10th for some reason...I did a little research on Perrone and he recently published this piece which is pretty interesting:
http://bigstory.ap.org/article/6e22f8ffcded4b2e9ba278bcc00f4f53/federal-pain-panel-rife-links-pharma-companies
Notice the change in tone by Matthew Perrone, AP reporter...in the February 10th story, he doesn't even mention the panel voted to approve probuphine
Matthew Perrone February 10th story:
http://www.news-journal.com/news/2016/feb/10/addiction-implant-faces-federal-scrutiny/
Matthew Perrone January 12th original story:
http://bigstory.ap.org/article/1026ba3e03ed4fc7bb44a6330ab41a2e/addiction-implant-faces-scrutiny-federal-panel
Short Interest
running at 730k
http://www.nasdaq.com/symbol/ttnp/short-interest
11 trading days...thank goodness for that. This is like watching paint dry.
I think they're just acknowledging they don't have a Canadian sales force.
It means nothing if probuphine isn't approved, but...from the Braeburn company overview presented at the JP Morgan conference, they are planning a 3Q 2018 launch of probuphine for chronic pain. That would mean approval occurring probably no later than 2Q 2018, with an sNDA submitted sometime in 2017.
From the Section 6.1 of the Braeburn License Agreement, regulatory milestones are paid for
(ii) Submission of NDA for Subsequent Indication of chronic pain
***
(iii) FDA Approval of NDA for Subsequent Indication of chronic pain
***
...so for those who are counting their chickens before they hatch, there should be a regulatory milestone paid in 2017...I would guess $10 million or so. That value has not be factored in by Zachs or anyone else.
Traders are going to trade...to me, it won't make a difference if probuphine is approved. And it won't make a difference if probuphine isn't approved. Eyes on the prize.
My hunch is just a WAG, but I imagine there is a bit a fire drill going on at the FDA..."Holy $*!#, they're paying attention to opioids!!!!"
I would assume approval of an abuse deterrent buprenorphine formulation would be a way to get ahead of the issue. The feeble press release issued is not going to end the criticism, and the would-be commissioner could find the White House withdrawing his nomination if he does not do something to change the narrative.
I think you are correct. Approval is very likely, with a post-marketing Phase IV required to determine long-term effects. Being long on Titan takes a lot of patience and determination, and I must admit to falling prone to bad thinking at times, i.e., (a) if this is such a good investment, why doesn't the rest of the world see it, and (b) the FDA just has it out for a small biotech like Titan.
As for (a), there are countless examples of discarded treasures trading in the pennies which later become market darlings worth 10x to 100x their "bottom." The market eventually sees value, but not in the most efficient or logical way. The problem is with "after the fact" analysis, all of those rags to riches stories seem like easy buy decisions now. At the time of purchase, when they were at their bottoms, it wasn't such an easy call.
As for (b), let's remember this isn't 2013. The FDA cannot summarily ignore non-inferiority and require another trial just because they feel like it without raising a shrug from the White House, Congress or the press. It is the perfect time for probuphine to be up for approval. A FDA commissioner's approval is being held up by the Senate because he hasn't done enough to control the opioid epidemic, and he is going to allow a CRL for a drug proven non-inferior (or even superior), with abuse deterrence literally built into the formulation? I don't think so. Probuphine will be approved, I believe, and I have a hunch it may happen this week.
The article raises some interesting points, but it seemed all over the place and glazes over the central issue which is a real "battle" occurring in the recovery community.
The author argues that federal and state money will only be provided to institutions willing to provide Medication Assisted Treatment (MAT)...i.e., use medication (methadone or buprenorphine) in connection with other recovery efforts (counseling, 12 step programs etc.).
However, that is a red herring because all "real deal" 12 step programs (AA or NA) refuse any government or corporate contributions as a matter of principle. So what the author is really referring to is government money for rehab centers based on the 12 steps that do not advocate MAT (Betty Ford, Hazelden).
Within 12 step communities, there is controversy over MAT. Hardliners say the only way to truly "work the steps" is to totally abstain from opioids. Others, particularly in NA, argue that opioids are different than alcohol or other addictive drugs, and that by rejecting MAT 12 step organizations are failing their fundamental purpose.
Very interesting Truth.
A quick check of Wikipedia shows:
Depression
A clinical trial conducted at Harvard Medical School in the mid-1990s demonstrated that a majority of unipolar non-psychotic persons with major depression refractory to conventional antidepressants and electroconvulsive therapy could be successfully treated with buprenorphine.[19][20][21][22][23][24][25] Clinical depression is currently not an approved indication for the use of any opioid, but some doctors are realizing its potential as an antidepressant in cases where the person cannot tolerate or is resistant to conventional antidepressants.
ALKS-5461, a combination product of buprenorphine and samidorphan (a selective µ-opioid receptor antagonist), is currently undergoing phase III clinical trials in the United States for augmentation of antidepressant therapy for treatment-resistant depression.
An implant would seem ideal in certain cases, especially with those who have contemplated suicide.
Probuphine:The Future for Opioid Addicts?
http://www.soberrecovery.com/addiction/probuphine-the-future-for-opiate-addicts/
Agreed...the FDA press release had sort of a cover-your-a@# feel to it. I didn't like it at all. As if to set the stage for...don't blame us, but we can't approve probuphine because we are reorganizing our whole approach towards opioids.
Man, what a horrible agency.
So the FDA wants to "Expand access to, and encourage the development of, abuse-deterrent formulations of opioid products" And probuphine sits unapproved.
Wow..thanks for your diligence in posting these articles. For once, the tide appears to have turned in Titan's favor with the increased congressional and white house focus on opioids...a fact that will not be lost on FDA decision makers.
As for the press coverage (NY Times, etc.), I think the difference has been Braeburn and the money to pay for a focused PR campaign.
Yep. His 13G shows that, post-split, he has around 200k more shares than last year.
Potential, yes, but it all depends on the fickle market. I do believe that all the attention to opioid abuse we have seen from policy makers and the media will draw more attention to TTNP if probuphine is approved.
The exact milestones are not disclosed, but in 2013 when the license agreement was renegotiated after the CRL, Braeburn reduced the approval payment from $45 million to $15 million, and increased the sales milestone payments by $30 million to $165 million. It only makes sense that the $30 million in additional milestone payments have relatively low trigger points, as Titan would be receiving money it used to be entitled to upon approval and that Braeburn, using the leverage available at the moment, essentially forced away from them. Such is life.
I haven't seen those milestones factored into any analyst reports. Another thing I have never seen mentioned by Zacks or Roth is that $25-$35 million is to be paid for regulatory milestones for chronic pain and Braeburn says that will be approved by 2018.
Nevermind...I think that was a bogus lead.
I have no idea if this is legit or not or if Dr. Rick is some scam, but this is dated today and if correct...
http://www.justanswer.com/medical/9j0ws-fda-approved-implant-designed-reduce-addicts-craving.html#re.v/491/
I think they are going for a country-by-country outlicensing of probuphine outside North America...I recall that in the EU, that was the strategy that made most sense because they couldn't get a blanket EU approval.
Later on in the company overview, it states "Additionally, Titan will be eligible to receive up to $165 million upon achievement of specified sales milestones and up to $35 million in regulatory milestones in the event of future NDA submissions and approvals for additional indications, including chronic pain.
So a $35 million milestone payment in 2018 if chronic pain is approved per Braeburn's schedule?
I understand what you're saying, and even the most die-hard long will probably take some shares off the table were Titan to reach double digits.
But if probuphine is approved, I think a $10 per share enterprise value for Titan in a buyout transaction would be inadequate.
Anyone do the math on a 2018 launch of probuphine for chronic pain from the Braeburn presentation?
Assuming they were approved on December 31, 2018, I don't think they'd get priority review so that's one year for FDA review (2018) , and at least a year or so for the Phase III trials (2017)...so initiation of the trials could occur in 2016. This really could be an awesome year.
My guess is the disparity in projected sales relates to the fact that you can simply inject the gel, but probuphine requires a surgical procedure.
Not really sure how that plays out in the real world. An injection is a whole lot easier than an implant, but an implant requires an office visit to remove so it's less easy for someone to just disappear and not follow up on treatment.
The knock I've heard on injectibles is that they present a problem in the even you need surgery for another medical condition. The drug is in your system and there is no way to get it out...which makes administering pain meds in the event of emergency surgery problematic. Probuphine can always be removed at any time through an office visit, so it doesn't have that complication.