AVP-786 for Treatment of Disinhibition

The number of clinical trials utilizing Avanir / Otsuka NMDA modulator drug AVP-786 is increasing with each quarter. The number now stands at six with the addition of the latest posting at Clinical Trials.gov that pertains to Disinhibition Syndrome here Treatment of Disinhibition. There is not a drug specifically approved for this indication, or Frontal Temporal Dementia (FTD) that I can find. The main inclusion into the trial is as follows.

• Documented diagnosis of a Neurodegenerative Disorder including frontotemporal dementia, Alzheimer's disease (AD), progressive supranuclear palsy (PSP), corticobasal degeneration (CBD), dementia with Lewy bodies (DBL), vascular cognitive disorders, or Huntington's disease, at least 3 months prior to Baseline.

This is a very broad inclusion into this phase 2 clinical trial, with only 12 patients aged 50-90 being recruited.  In general the patient must have some sort of Neurodegenerative Disorder.

Bottom Line:  It's easy to see why Otsuka bought Avanir Pharmaceuticals for $3.5 billion in 2014. They see the potential for NMDA drug AVP-786, and it's use for many indications. Thank you for reading.  
 

Still A Bull With Volatility

Weekly charts are a valuable tool to understanding a more distant look into market comparisons. Then we can decide whether we are still in an up trending market or we have turned downward, based on the technical pattern.  Below is a weekly chart of the S&P 500 Index.

Source:  Shaw Investments, StockCharts.com

From the weekly chart above.  The current correction low that we achieved yesterday, is above the correction low that was achieved in 2014, still creating an upward trend line, based on the weekly chart.  

Source:  Shaw Investments, StockCharts.com

The $VIX chart above has not seen high levels like this since 2011.  Expect volatility in the near term, until the $VIX reading declines to more normal historical levels, which could take a few weeks.  

Bottom Line:  The S&P 500 Index above put in a correction reading (greater than -10% from peak), but remains above the 2014 correction low, creating an upward trending market.  So we are in a long term bull market, and an intermediate term up trending market.  The $VIX remains very high historically, so expect a whip lashing type market in the near term or until the $VIX declines to more historical average levels.  Thank you for reading.

Week In Review

Remaining objective during stock market corrections is the best possible solution.  We can remain objective by viewing charts, and by blocking out any emotional related news that seems to circulate, when there is a sell-off at hand.  Remember, market corrections are a healthy process that cleanses out all the excesses, to the point that value creation emerges.  In other words, these are good times to be putting cash to work, which we have this week.  So let's view a couple charts below to understand better, how far down this correction could go.  

Source:  Shaw Investments, StockCharts.com

The above chart is of the S&P 500 index, which is one of the world's most watched index.  I tracked last year's market correction loss just to compare what we may be looking for at this precise moment. Last October's correction took the market down -9.89%.  We are currently lower from the recent high at -7.29%.  So we are closing in on last years percentage correction low.  In addition the market at this time is very oversold, and we should get a relief bounce higher at minimum, in the near future. 

Source:  Shaw Investments, StockCharts.com

The above chart depicts what is known as the VIX.  The VIX is also known as a fear gauge, based on how much volume is exhibited in the options market with put buying.  The higher the VIX spikes the more fear is said to be in the market.  The important thing here is to observe the extremes of the VIX. Based on that theory, the huge spike in the VIX could signal a sell-off stock market bottom may be getting close at hand.  The move higher is getting very close to matching last years VIX correction high reading.  

Bottom Line:  Great time to be adding to existing positions over the course of this correction.  The sell-off so far, is getting close to last years correction low, so we may be getting close to a bottom, if using last years sell-off on a comparison basis.  Thank you for reading.  

CTP-499: Special Protocol Assessment (SPA)

Two important FDA designations are Orphan Drug Status and Special Protocol Assessment. Today we'll discuss the SPA and how it relates to CTP-499.  An SPA is a designation from the Food and Drug Administration that an uncompleted phase 3 clinical trials design, clinical endpoints, and statistical analysis are acceptable for FDA approval. Basically means that if the company meets those pre-determined endpoints in the trial, FDA approval should be a very high probability.
We previously wrote about one of Concert's drug for Type 2 Diabetic Nephropathy named CTP-499 here, What is CTP-499. The company has been under negotiations with the FDA for an SPA for that drug for over a year.  The CEO has stated that they should have an SPA for CTP-499 by the end of this calendar year.  After that, a partnership will be selected, and the costs of the lengthy (three years) trial will be split in some equitable way. The selected partner should feel more comfortable about the trial's design being granted an SPA from the FDA, and there will be one pivotal phase 3 clinical trial, as opposed to two phase 3 trials. The trial's design in this case is a result of the completed phase 2 clinical trial's findings, from a subset of patients and their results vs. placebo.  If the phase 3 trial starts the beginning of 2016, lasts three years, and the company files a New Drug Application (NDA) after that, FDA approval could potentially take a year from there.  So, by the beginning of 2020, the drug could go to commercialization and have approximately ten years of patent exclusivity.  
The patent for CTP-499 runs until 2029 - 2030 in the US, EU, and Japan.  The market for Diabetic Nephropathy is estimated to reach $3 billion by 2020 from research here Global Market Study. CTP-499 will be used as co-therapy with ACEI and/or ARB for patients that have advanced to a specified point of disease.  Thank you for reading.