Mast Therapeutics, Inc. (MSTX)

[Blinkx90]

Focus Ticker: Mast Therapeutics

Mast Therapeutics (NYSEMKT:MSTX) shares jumped nearly 9% on Tuesday to close under $0.50. MSTX shares have struggled to break through despite the potential of its lead product candidate in sickle cell disease and the fact that enrollment in the EPIC trial is progressing well.

On September 15th, MSTX said in a presentation that the EPIC trial is more than 75% enrolled. With vepoloxamer, MSTX is looking to meet a significant unmet need. Vepoloxamer is purified poloxamer and was initially developed by Dr. Robert Hunter, MD, PhD (Distinguished Professor and Chairman, Department of Pathology and Laboratory Medicine, University of Texas Medical School at Houston). A study involving 255 patients did not meet the primary endpoint of reduction in duration of a painful crisis. A post hoc responder's analysis was done and based on the observations from this, MSTX has designed its EPIC trial. MSTX acquired the drug from Dr. Hunter's team in 2011.

The better designed EPIC trial has the potential to be successful and if it is MSTX could bring to the market, a drug with potential peak sales of $720 million. The peak sales estimate is based just on the number of sickle cell cases in the U.S. alone.

The question then is why is MSTX still struggling to breakthrough. In my opinion, investors are remaining on the sidelines because of past failures of MSTX. Mast Therapeutics was formerly known as Adventrx. Adventrx suffered two major setbacks. The first was in 2006 when the company's CoFactor in Phase IIb study failed. In 2010, the company suffered the second setback when its Exelbine, an equivalent to an older cancer drug Navelbine, was rejected by the FDA. These two setbacks have led to questions about MSTX's ability to reach commercialization. However, with vepoloxamer, the company has the best chance to reach commercialization stage.

Recently, Roth Capital analyst Michael Higgins spoke to Key Opinion Leader, Dr. Richard Drachtman. Dr. Drachtman treats 450 sickle cell patients at the Rutgers Cancer Institute of New Jersey. Higgins said in a research note that Dr. Drachtman's comments were in his view supportive of the EPIC outcome.

I believe that MSTX will trade sideways until early 2016. In the first quarter of 2016, the company is expected to report top-line data from the EPIC trial and this is a major upcoming catalyst that could boost the stock price.

http://seekingalpha.com/article/3528206-premarket-biotech-digest-drug-pricing-mast-therapeutics-upside-mylan-perrigo