Pozen Inc. (POZN)

[ToysInTheAttic]

POZN - Good Article in Local Rag this morning


http://www.newsobserver.com/2010/04/30/460214/pozen-eager-for-drugapproval.html

POZEN Eager For Drug Approval

Pozen reported that its losses narrowed in the first quarter, but Wall Street and top management remained fixated on whether regulators will give the green light to the Chapel Hill company's experimental arthritis drug.

The Food and Drug Administration is expected to rule as soon as today on the company's application for Vimovo, which would be marketed by the drug giant AstraZeneca if it should win approval. The go-ahead from the FDA would give Pozen a second product, a benchmark few of the Triangle's small drug companies have attained.

"This is a game-changing event coming up for us," CEO John Plachetka told analysts during a conference call Thursday.

Analyst Jonathan Aschoff of Brean Murray, Carret & Co. projects that annual worldwide Vimovo sales could peak at $800 million, generating about $80 million in royalty revenue for Pozen. By comparison, Pozen's revenue from royalties and milestone payments totaled $32.2 million for all of last year.

Pozen shares closed Thursday at $12.08, up $1.13. Shares have nearly doubled since the beginning of March, driven largely by anticipation of a positive outcome for Vimovo.

The stock would undoubtedly take a significant hit if the FDA delayed its ruling or raised concerns about Vimovo.

The medicine would be "the first new oral arthritis drug introduced in quite some time," if it wins approval, Plachetka said.

"Obviously, we're going to be very happy if it is approved, extremely disappointed if it isn't approved," Plachetka said in an interview Thursday afternoon.

Revenue generated from Vimovo sales would be a 10 percent royalty on U.S. sales, with varying rates in foreign markets. Pozen also stands to reap considerable revenue from milestone payments from AstraZeneca.

In the short term, that includes $20 million upon FDA approval, plus $25 million when the drug wins government approval in a major foreign market. That could happen in Europe as soon as the second half of this year, according to AstraZeneca.

Longer-term, Pozen could receive up to $260 million for achieving sales performance milestones.

Plachetka referred questions about the pricing of Vimovo and sales projections to AstraZeneca.

AstraZeneca spokeswoman Sandra Heinig said that, if approved, Vimovo would be available this summer.

But she said the company considers pricing and sales projections to be proprietary information.

In the first quarter, Pozen posted a $3 million loss, or 10 cents per share, versus a loss of $3.5 million a year ago.

Revenue, which includes royalties from its migraine drug Treximet, totaled $6.9 million, versus $8.8 million a year ago.

Royalties from Treximet, which is marketed by GlaxoSmithKline, totaled $3.8 million, up from $1 million a year ago - thanks mostly to its royalty rate's more than tripling to 18 percent.

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