2 Biotechs Investors Should Pick Up Before Key PDUFA Dates

2 Biotechs Investors Should Pick Up Before Key PDUFA Dates May 4, 2016
By Mark Terry, BioSpace.com Breaking News Staff

The Prescription Drug User Fee Act (PDUFA) dates, which are the dates that the U.S. Food and Drug Administration (FDA) schedules to make a decision to approve a new drug candidates, can be key dates for investors in biopharma companies. Writing for The Motley Fool, Bret Jensen takes a look at two companies who have key PDUFA dates coming up.

Vanda Pharmaceuticals

Vanda Pharmaceuticals , headquartered in Washington, DC, is expecting a decision on its supplemental New Drug Application (sNDA) for Fanapt (iloperidone) on May 27. The drug is a maintenance treatment for schizophrenia in adults.

On Dec. 22, 2015, the European Medicines Agency (EMA) accepted the company’s Marketing Authorization Application (MAA) for Fanaptum tablets for schizophrenia. Fanapt is approved in the U.S. for schizophrenia in the acute setting, as well as in Israel and Mexico.

The company also markets Hetlioz, a melatonin receptor agonist approved by the FDA in 2014 for the treatment of Non-24-Hour Sleep-Wake Disorder, and was accepted in 2015 in Europe to treat Non-24 in totally blind adults. It is also soon going to start a Phase III trial of Hetlioz for Jet Lag.

“I picked up a small stake in Vanda this morning,” wrote Jensen, “as it seems undervalued based on price to sales ratio and has a developing pipeline with multiple ‘shots on goal,’ not to mention increasing revenue from commercialized products. Add in a solid balance sheet with a few clawing its way to profitability and an upcoming PDUFA data; it is worth consideration for aggressive investors.”

Difei Yang, an analyst with Brean Capital, maintained a “buy” rating for Vanda on April 21, with a price target of $20. “We applied a very conservative set of assumptions in the DCF analysis that includes Fanapt revenue recording minimal growth despite possibly receiving schizophrenia maintenance therapy indication; also no consideration was given to pipeline opportunities and no consideration was given to potential European sales associated with Hetlioz Non-24.”

Vanda Pharmaceuticals is currently trading for $8.52 per share.

Jensen’s other choice is a little more complicated. Redwood City, Calif.-based Relypsa doesn’t have a PDUFA coming up. What it does have is a competitor with a PDUFA date of May 26.

Relypsa markets Veltassa (patiromer) for the treatment of hyperkalemia. Veltassa is the first approved treatment for hyperkalemia in more than 20 years, and was approved in late 2015.

ZS Pharma

San Mateo, Calif.-based ZS Pharma has a drug, ZS-9 (sodium zirconium cyclosilicate), which had positive interim results in a Phase III trial in November 2015. In December, UK-based AstraZeneca bought the company for $2.7 billion.

ZS Pharma’s ZS-9 PDUFA date is May 26. Jensen wrote, “I believe the FDA will approve this drug which should become the standard of care in the smaller Acute market due to its faster action. Veltassa should be dominant in the larger Chronic market given it is better for patients with hypertension and/or periphery edema, a good portion of the ~$2 billion annual hyperkalemia market.”

All well and good, but a complicating factor is that Relypsa appears to be a very attractive acquisition target. When AstraZeneca picked up ZS Pharma, it wasn’t the only company pursuing it. Other potential buyers include Paris-based Sanofi and Swiss company Actelion Pharmaceuticals . Actelion bid $2.5 billion for ZS Pharma.

And it’s also possible AstraZeneca might consider buying Relypsa as a way of locking up the hyperkalemia market.

And the approval of ZS-9 this month isn’t necessarily a slam dunk. Jensen notes that the FDA could hold off and get more safety data throughout the summer, or attach a so-called “black-box” safety label on ZS-9. “My own view is ZS-9 will be approved at this May date but with a label. Relypsa will then know exactly what the competitive landscape will be in this market; so will its possible suitors. Real negotiations can then begin towards any purchase.”

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