What I appreciate most about this board is it's focus on due diligence and the mutual respect posters show here. We all have different investment styles/risk tolerances but that doesn't mean that we can't learn from one another.
First, it's vigabatrin not vigapatin. Second, at a 25mm market cap, CPRX isn't on any ones radar screen (although Cowen recently initiated coverage with an "outperform"). The market completely discounted the stock after the company failed to meet its primary endpoint in its P2a trial of vigabatrin aka CPP109. However, the trial was poorly designed. Basically, they relied on addicted patients to "self-report". Not surprisingly, almost 2/3 didn't take the prescribed dose, go figure. As a result of the low compliance, the trial ended up underpowered.
Although post-analysis, cherry picking of the data is usually a big red flag, in this case, because of the non-compliance issue, it offers a reasonable explanation of why the trial failed. When you break out the 35% that did take the drug, the trial actually easily met its endpoint. Apparently the National Institute on Drug Abuse and VA reached the same conclusion which is why they are picking up 75% of the cost to run the P2b trial, which is currently enrolling.
Vigabatrin (brand name Sabril) is already approved for use in infant epilepsy but, as you point out, the drug has serious AE's:
Black Box Warning Label: VISION LOSS
Sabril causes progressive and permanent bilateral concentric visual field constriction in a high percentage of patients. In some cases, Sabril may also reduce visual acuity.
Risk increases with total dose and duration of use, but no exposure to Sabril is known that is free of risk of vision loss.
Risk of new and worsening vision loss continues as long as Sabril is used, and possibly after discontinuing Sabril.
Periodic vision testing is required for patients on Sabril, but cannot reliably prevent vision damage.
Because of the risk of permanent vision loss, Sabril is available only through a special restricted distribution program.
Pre-clinical trials indicate that CPRX's 2nd drug CPP115 offers a far better safety profile and efficacy then Sabril, the drug Lundbeck acquired for $900mm (600mm + 300mm in milestone payments) in 2009. Sabril is now generating ~ $100mm in revenue despite the rather dire black box warning label. Although just entering clinical trial, CPP115 makes CPRX far more interesting to me from an investment perspective.
So, relative to its current market cap I really like the company's pipeline and their competitive position. Beyond this the CEO has maintained a significant owner position and has successfully raised $'s with high quality investors such as Fidelity and Federated.
CPRX is definitely not every ones cup of tea. CPP109 failed its P2a and CPP115 is just entering trial but I wouldn't write it off the investment opportunity here so quickly. The stock is currently trading at $1.13, lets just see where things stand after the CPP115 initial results.
