After starting a serious bull run in 2012, biotech stocks had an incredible year in 2013 and are starting 2014 at full throttle as well. High-dollar acquisitions over the last couple years have raised the bar for the value of drugs in development, especially those targeting areas of great unmet medical need. The U.S. Food and Drug Administration enacting new policy, namely the breakthrough therapy designation, to expedite development of new drugs has further supported loftier valuations as companies can potentially shave tens of millions of dollars in development expenditures and reach commercialization more quickly.
There are countless biotechs that have seen enormous rises in valuations recently, including Elite Pharmaceuticals, Inc. (OTCBB:ELTP), a specialty pharma aiming to utilize the FDA 505(b)(2) pathway to rapidly bring its drugs to market. In short, a 505(b)(2) designation allows for accelerated development based upon the active ingredient of a new drug candidate being that of an already approved drug.
The company employs a strategy of using its proprietary technology to improve drugs that have come off patent protection to create abuse-resistant, controlled-release generics. Elite’s Northvale, New Jersey headquarters is not only home to its corporate offices, but also R&D labs and a GMP manufacturing facility that is DEA registered for research, development and manufacturing, meaning Elite can bring a product from concept to commercialization in house, as well as generate contract manufacturing revenue.
With the increasing number of opioid prescriptions, opioid abuse has also risen. Elite’s technology uses a multi-particulate capsule mixing naltrexone, an opioid agonist and an opioid antagonist that effectively makes the opioid agonist work when taken properly and allows the naltrexone to harmlessly exit the body. Conversely, if the capsule is crushed or dissolved (as often is done in opioid abuse), the naltrexone is released, subsequently binding with receptors to block the euphoria that person abusing the drug was hoping to achieve.
Elite has already commercially launched seven products, with two more close to hitting pharmacy shelves. The launch of Naltrexone 50 mg tablets in September and Phentermine 15 mg and 30 mg tablets in June, coupled with year-over-year growth in other products helped the company to increase revenue by 83% in the second quarter ended September 20, 2013 to $1.2 million U.S. On a GAAP basis, net loss for the quarter was two cents per share, or $9.6 million U.S.
Consolidated quarterly loss from operations totaled $700,000 U.S.
The company is looking to add more products to its commercial portfolio with the start of two bioequivalency studies in the last six weeks. In December, Elite said that the first patient was dosed in a pilot study in healthy volunteers for ELI-201, the company’s twice-a-day abuse deterrent oxycodone/naltrexone product. A pivotal bioequivalency study for ELI-201 is scheduled to begin in March.
Tuesday afternoon, Elite announced that a separate pivotal bioequivalency study has begun with dosing of healthy volunteers. The company was more secretive about this drug, not disclosing the name, only stating that it is an "opioid deterrent product" using Elite’s
pharmacological technology. The trial will be evaluating the patients’ exposure to naltrexone under fasted and fed conditions, as well as measuring for safety and tolerability.
The research is being conducted under the direction of Camargo Pharmaceutical Services, an expert in the 505(b)(2) process.
Shares of ELTP rose gain in Wednesday trading, marking seven straight days of advancement as investors cheer additional clinical trials. Shares have essentially tripled from levels early in August, including the 39% climb in trading Wednesday to 26.5 cents U.S.
