What is CTP-499

CTP-499 is the deuterium-containing pentoxifylline.  CTP-499 is the companies most advanced drug, which is for the treatment of diabetic nephropathy (kidney disease or kidney damage that occurs in people with diabetes). The company completed a phase 2 trial that missed the primary end point, which was to measure the change in urinary albumin to creatinine ratio, Urine Albumin-to-Creatinine Ratio (UACR).  What the company did find was that at 48 weeks, six patients out of 58 in the placebo group saw their serum creatinine levels spike more than 50%, versus just one patient out of 65 in the treatment group.
Concert is seeking a Special Protocol Assessment (SPA) from the FDA for CTP-499. In general, a SPA is an agreed upon endpoint that a company and the FDA use for a clinical trial.  If that primary endpoint data is statistically significant, than a new drug application could be filed and potential FDA approval.
A reduction in the rate of renal disease measured by a time-to-event analysis of the composite of increase of serum creatinine (greater than or equal to 50%) or end stage renal disease versus placebo treated patients, was agreed to be an acceptable Phase 3 endpoint to support the filing of a new drug application (NDA).  In addition, patients with a higher level of serum creatinine at baseline (above-median UACR) saw more pronounced benefits with CTP-499, compared to patients with below median UACR levels baseline, at 48 weeks. That could potentially be an inclusion into the study criteria, which could also benefit the results CTP-499 achieves in the trial.  I am expecting the company to announce the start of a pivotal phase 3 trial in 2015, after the FDA approves the SPA for that trial. The company has mentioned that they may seek a partner for this indication. I give this upcoming phase 3 trial a high probability of success, if the FDA approves the Special Protocol Assessment that the company has submitted.  Thank you for reading.

 

Concert Pharmaceuticals - Secondary Offering ($14.76)

CNCE has issued a secondary offering to raise around $52 million dollars in additional capital.  The company is issuing 3.3 million shares, and an additional 495,000 thousand shares, as an over allotment that the underwriters can purchase at the public price (less discounts and commissions) within 30 days.  The CEO has stated that they planned on retiring the $7 million in debt this year. After the company completes this offering, and assuming that the underwriters do take the additional 495,000 shares, the company should net around $46 million after all expenses on the offering, and an additional $6 million on the over allotment. Once the company retires the $7 million debt, they should have approximately $120 million cash on hand with zero debt.  The timing was right for this offering.  The company is taking advantage of a hot biotech market, (their stock hit a new high just this week at $18.29) to complete this offering. Thank you for reading.

Lundbeck - New Holding ($19.19)

We recently purchased shares of Lundbeck under the symbol (HLUYY).  I previously mentioned this company before here Lundbeck and here Clinical Trial Update.  The company is located in Copenhagen Denmark, and their description from their website is as follows.
Lundbeck's R&D strategy is aimed at enabling the discovery and development of new pharmaceuticals targeting the underlying mechanisms of brain disorders. This approach allows us to treat the symptoms more effectively and also to potentially alter the course of the diseases.  The strategy requires comprehensive research into the brain and the biology and mechanisms of brain diseases, as well as improved understanding of research targets and clinical outcomes. 
The company falls into the catagory of a CNS, (central nervous system) research and development company. I best describe this as a value investment and a turnaround story. The company and its partner (Otsuka), have suffered from patent expiration from their main producer Abilify. But during the past two years the company has produced some successful clinical trials with extended patent dates for drugs that treat MDD, (major depressive disorder) and acute schizophrenia, both of which I am expecting FDA approval mid 2015.  The new products coming on line with extended patent dates, makes this a lower risk value proposition.  My initial price target on the stock is around $27.00 in the intermediate term.  Thank you for reading.

Acadia Phamaceutical - New High ($45.88)

Speculation that there is a buyout coming for ACAD today, has led the stock higher by 17%.  But I believe the advance in the stock today, is due to the planned filing of their NDA (new drug application) for Nuplazid, for Parkinson's Disease Psychosis or (PDP), and an analyst price reiteration at noon.  Either way the stock is getting a nice upside lift today, even as the overall market is selling off. Below is a daily chart of ACAD.

 

Concert Pharmaceuticals - ($14.73)

Concert Pharmaceuticals (CNCE), is an interesting company, with a well established and cohesive management team.  The company description below is directly from the most recent 10-K. "We are a clinical stage biopharmaceutical company applying our extensive knowledge of deuterium chemistry to discover and develop novel small molecule drugs. Our approach starts with approved drugs, advanced clinical candidates or previously studied compounds that we believe can be improved with deuterium substitution to provide better pharmacokinetic or metabolic properties, thereby enhancing clinical safety, tolerability or efficacy. We believe our approach may enable drug discovery and clinical development that is more efficient and less expensive than conventional small molecule drug research and development".

The company is taking existing drugs, and potentially improving them with selective deuterium.  They plan on developing drugs in-house and through partnership with other companies.  Some quick facts below.

Quick Facts:
22 million shares outstanding
330 million market cap
75 million in cash

Intellectual Property:
AVP-786 (Otsuka) (2030 US), (2028 EU) 
AVP-923 (Otsuka) (2026 US), (2023 EU)
Rexulti (Otsuka) (2027 US), (2025 EU)
CTP-499 (2029 - 2030) U.S. EU, Japan
CTP-730 (2029 - 2034) U.S. EU, Japan
JZP-386 (2030 - 2032) U.S. EU, Japan
CTP-656 (2032) U.S.
Kalydeco (Vertex) (2027 US), (2025 EU)

As you can see above, the company has done a fine job of protecting their intellectual property with extended patent dates, which gives them enough time to get through clinical trials to commercialization, either in house or through partnership. A $280 million market cap puts CNCE in microcap territory (less than $300 million). Hard to find a microcap stock with this much future potential, with an established and cohesive management team in place. We'll have more to say about Concert Pharmaceuticals. Thank you for reading.