Titan Pharmaceuticals — Update 22 February 2016

Titan Pharmaceuticals — Update 22 February 2016

Titan Pharmaceuticals

Analyst avatar placeholder

Written by

Titan Pharmaceuticals

PDUFA date extended to May 2016

Pharma & biotech

QuickView

23 February 2016

Price

$3.41

Market cap

$69m

Share price graph

Share details

Code

TTNP

Listing

NASDAQ

Shares in issue

20.1m

Business description

Titan Pharmaceuticals specializes in the development of treatments for select chronic diseases utilizing its proprietary ProNeura implant drug delivery technology platform. Titan recently received FDA advisory committee recommendation for approval of a six-month buprenorphine implant for opioid addiction.

Bull

Implantable delivery system for opioid addiction treatment provides convenience and possibly better patient compliance.

Significant opportunity exists for improved delivery system for Parkinson’s disease therapies.

Pending approval for Probuphine triggers US$15m milestone payment.

Bear

Probuphine treatment is not designed as first-line therapy.

Company has changed its business strategy several times over the years.

ProNeura for Parkinson’s disease is in preclinical stage.

Analysts

Beth Senko

+1 646 653 7026

Christian Glennie

+44 (0)20 3077 5727

In January, an FDA Advisory Committee recommended approval of Titan Pharmaceuticals’ lead product, Probuphine, the first long-acting form of buprenorphine delivered through an implant, as maintenance treatment for opioid addiction. Probuphine uses Titan’s ProNeura long-acting subdermal implant technology. On 19 February, the decision date was delayed until 27 May. Separately, Titan requested a pre-IND meeting for its Parkinson’s disease therapy and recently added a candidate for hypothyroidism to its pipeline.

Strong data lead to a likely approval

In April 2013, the US FDA dealt a setback to Titan by requesting additional studies to look at Probuphine’s efficacy and safety, in addition to studies to ensure that physicians were adequately trained to insert and remove the implants. The primary measure of response in the new study was a clean (opioid-free) urine sample in at least four of the six months in the study. This Phase 3 study, submitted to the FDA in September 2015, had response rates of 96.4% for the Probuphine arm and 87.6% for the sublingual buprenorphine/naloxone arm. In addition, 88% of patients receiving Probuphine had clean urine samples for all six months, compared with 72% of patients receiving Suboxone.

Potential royalties of $45-100m per year

Titan will receive tiered royalties of approximately 15-22% on net sales from its development partner, Braeburn. The company’s US peak sales estimate of $300-500m translates to potential royalties of $45-100m annually until Probuphine’s patent expires in 2024. Titan will receive a $15m payment on FDA approval and up to $165m in sales milestone payments.

Expanding the pipeline

Titan is moving ahead on two new candidates using its implantable drug delivery technology. It requested a pre-IND meeting with the FDA for its implantable ropinirole, for Parkinson’s disease. The company believes that its implantable technology will reduce side effects by maintaining a steady concentration in the blood. Titan also plans to file an IND for ProNeura-T3 for hypothyroidism in 2017.

Valuation: EV of $59m

Titan’s enterprise value of $59m is based on cash of $9.7m at the end of Q3. The company will receive a $15m milestone payment when Probuphine is approved, funding the company into 2018.

Consensus estimates

Year
end

Revenue
($m)

PBT
($m)

EPS
($)

DPS
($)

P/E
(x)

Yield
(%)

12/14

3.7

(2.4)

(0.22)

0.0

N/A

N/A

12/15e

1.7

(11.1)

(0.54)

0.0

N/A

N/A

12/16e

15.4

5.4

0.24

0.0

14.2

N/A

Source: Bloomberg. Note: 2014 results adjusted to reflect 1:5.5 reverse split in Sept 2015.

Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority (www.fsa.gov.uk/register/firmBasicDetails.do?sid=181584). Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2016 Edison Investment Research Limited. All rights reserved. This report has been prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison's solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are "wholesale clients" for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document.
A marketing communication under FCA rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a "personalised service" and, to the extent that it contains any financial advice, is intended only as a "class service" provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited ("FTSE") (c) FTSE [2016]. "FTSE(r)" is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE's express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Snakk Media — Update 22 February 2016

Snakk Media

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free