Miami, FL – August 26, 2018 (EmergingGrowth.com NewsWire) — EmergingGrowth.com, a leading independent small cap media portal with an extensive history of providing unparalleled content for the Emerging Growth markets and companies, reports on Palatin Technologies, Inc. (NYSE: PTN).
Equity analysts are starting to take notice on an upcoming biopharmaceutical company, Palatin Technologies Inc., who is in the middle of having their lead asset, Bremelanotide, evaluated by the US Food and Drug Administration. If Bremelanotide gets approved, it will be the first and only “take-as-needed” pharmacologic option in the US, for the treatment of premenopausal female hypoactive sexual desire disorder, commonly known as low sexual libido.
Leading boutique research firms have provided their imprimatur on PTN. In April 2018, H.C. Wainright & Co’s Joseph Pantginis initiated coverage on PTN with a “buy” rating, and $5 per share price target. Subsequently, on June 2018, Michael Higgins from Ladenburg Thalmann released an initial report valuing PTN shares at $3 per share, and rated the stock a “buy.” As such, this implies that the share price potential upside is between three to five fold from current levels.
“Superior Drug in An Unaddressed Market”
The recent bullish calls on the company are completely unsurprising. There is a huge opportunity in the female sexual disorder market, as the company discovered that there are 8 million American patients who are mostly female, seeking medical care for low sexual desire.
There were no prescribed drugs available in the market to address low sexual libido issues in women, until the FDA approval of Flibarensin, which is marketed under the brand name, Addyi. High cost and side effects, however, kept women from signing on, and sales of the drug never took off. Further, there was a lack of marketing and distribution support from Valeant Pharmaceutical International Inc. (NYSE: VRX), the company that acquired Addyi’s manufacturer Sprout Pharmaceuticals Inc. for $1 billion, following the FDA approval of the drug.
On the other hand, the FDA acceptance of the new drug application for Bremelanotide, could pose stiff competition to Addyi, and potentially derail Addyi’s plan to re-launch into the market. It seems that Bremelanotide has the upper hand, as the drug can be self-administered as desired, rather than Addyi’s strict dosage schedule. Moreover, clinical results show that Bremelanotide has low number of patients suffering from the drug’s side effects, compared to clinical results of Addyi.
While it may be too early to project, Bremelanotide and Addyi aim to be in the same league as other libido-enhancing drugs such as Pfizer Inc.’s (NYSE: PFE) Viagra and Cialis, manufactured under the partnership of Sanofi(NYSE: SNY) and Eli Lilly and Co. (NYSE: LLY).According to industry forecasts, annual drug sales reaching $100 million within 4 years could be achieved, assuming PTN will be able to implement its marketing and distribution strategies.
“Global Distribution Efforts”
After the successful Phase 3 clinical trials, the company entered into an exclusive agreement with AMAG Pharmaceuticals Inc. (NASDAQ: AMAG)to develop and market the drug in North America. Moreover, they also have entered into a licensing agreement with Kwangdong Pharmaceutical Inc. in Korea and Shanghai Fosun Pharmaceutical Industrial Development in China. Finally, they want to secure an agreement with a European partner to improve their global efforts to distribute the drug.
On a trailing 12-month basis, the company reported net profit of $26 million, primarily derived from a $20 million milestone payment from their licensing agreement with AMAG Pharmaceuticals. The company does not have notable recurring revenues, as it remains a developmental biopharmaceutical firm, and the last 5 years reveal an accumulated cash burn of $118 million. Having said this, substantial profits can only expected upon commercialization of Bremelanotide, expected to commence on March 2019.
“Market Catalysts: FDA Approval and Possible Acquisition”
PTN’s valuations, however, are heavily dependent a lot on optionality – a high probability that the FDA will approve the new drug application, and subsequent consumer acceptance. A better scenario would be a Big Pharma tuck-in acquisition on PTN for $1 billion, at least matching Sprout Pharmaceutical’s private market valuations.
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