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DARA Update per SA - Jason Napodano JPM Conference

link : http://seekingalpha.com/article/1962021-notes-from-one-on-one-meetings-during-san-fran-biotech-week-day-2?source=kizur_tw

Dara Biosciences Inc. (DARA): Meeting took place with Dr. David Drutz, MD, CEO, and Chris Clement, President and COO

It was a great meeting with DARA Bio, but we'll cut directly to the chase and say right up front - there was no update on the status of the pending orphan drug application for KRN5500. We've covered this topic several times in 2013, and our most recent article can be found on Seeking Alpha, so there's not much more to say on the subject. We spent the majority of the meeting talking about the recent sales force and product expansion and the company's now six commercial assets in Soltamox, Gelclair, Bionect, Binosto, Ferralet 90, and Aquoral. Below is a fantastic slide from the company's investor presentation showing how DARA plans to leverage these six products into becoming a big player in the oncology and supportive care specialty pharmaceutical market.



Management told us the sales force expansion has been completed and the 20 new representatives should be in the field by the end of January 2014. The company spent much of December training and educating the new reps. There will be a national sales meeting in February 2014 to officially kick-off the new campaign. Throughout 2013, DARA had only five reps and three products. We expect that a four-fold increase in sales reps and a two-fold increase in product offerings will dramatically help drive the top-line in 2014 and beyond.

We believe DARA's stock remains attractively valued. Revenues in 2012 were non-existent. For 2013, we model revenues at $0.35 million, again…pretty low. However, based on the recent sales force expansion and the three new products DARA is now co-promoting from Mission Pharmacal, we think DARA can do over $2.0 million in revenues in 2014 and $10 million in revenues in 2016. DARA's market capitalization is only $22 million right now. If our modeling holds, the stock should be trading at over $1.00 by year-end 2014, and that is based solely on the six current marketed products and has no value for KRN5500. We think orphan drug designation on KRN5500 could triple the market value of the company. A licensing partner will probably be announced soon after the FDA's decision. Our conclusion is that investors can buy DARA now and get both an emerging specialty pharmaceutical story at a reasonable price, and a Phase 2b drug in KRN5500 for free.