Titan Pharmaceuticals Inc (TTNP)

[Doctor Detroit]

My instincts tell me you're right, but the market doesn't agree with us right now. I do believe that, of those investors who are aware of probuphine, a significant percentage are not purchasing because it is an implant, and historically, implants have not done all that well.

There are plenty of distinguishing characteristics to refute that argument:

-The typical knock on implants is basically: "why would someone undergo surgery when they can just take a pill." The argument assumes no issue with compliance. I believe the reason over 2,300 doctors were trained so quickly is because of the overwhelming frustration in the medical community of prescribing buprenorphine, only to have the patients stop taking the medication to get high. That's not a judgment, it's just a fact. Addiction is different.

Certainly a significant (and somewhat vocal) portion of the patients in the potential addressable market are vehemently opposed to ever having an implant. For personal reasons, they simply believe it is too instrusive, and object to having the element of choice taken out of their recovery. That is fair enough. No one is claiming we will have 100% market share. Zacks has only predicted a 2-3% market share. Even with that conservative, small percentage, and assuming a stable (not growing) addressable market of around a half a million patients stabilized on 8mg or less of buprenorphine, that's 10 to 15 thousand patients at two treatments a year (30,000 x $4,950 =$150 million). That should mean about $25 to $30 million in royalty income to Titan, with net earnings of about a buck a share.

Personally, I believe that as the opioid epidemic is eventually addressed (albeit much too late), addicts will be moved from "frontline" treatment of 16mg to lower dosages, and the class of patients stabilized at 8mg or less will at least double and potentially triple. The effect of this increase, along with a supplemental NDA for chronic pain, I believe will make probuphine a billion dollar a year drug by 2020, even if only 5% market share of opioid abusers stabilized at 8mg is obtained.

But I could be wrong. For the time being, it will be really interesting to see how many of the 2,300 trained actually make a prescription in the 3Q. Zacks is predicting about 400 prescriptions, and although I'm not expert in the intricacies of insurance coverage or drug roll-outs, I have to think most of those trained will be incentivized to actually try probuphine out as soon as they can.