Psivida: Small-Cap Ophthalmology-Based BioTech Positioned For Long-Term Growth
(Thomson Reuters ONE) -
pSivida (NASDAQ:PSDV)develops drug delivery products for treatment of back-of-
the-eye diseases that are administered by implantation, injection or insertion.
The company's lead product candidate includes Iluvien, licensed to Alimera
Sciences (NASDAQ:ALIM). Iluvien is a drug that is inserted into the back of the
eye that delivers fluocinolone acetonide (FA) for the treatment of diabetic
macular edema (DME), a cause of vision loss. Alimera received its second CRL for
the drug in November 2011, so Iluvien is not approved in the US. It is uncertain
whether Alimera will pursue the clinical trials that the FDA would require for
resubmission. However, Iluvien has been deemed "approvable" by the seven
European countries where Alimera submitted its applications. Individual
approvals are expected to be received in the coming months and will enable
Alimera to commence marketing of Iluvien.
Alimera is also conducting Phase II clinical trials with Ilu for the treatment
of wet and dry form of age-related macular degeneration, and retinal vein
occlusion. These trials fall under the license agreement that pSivida has with
Alimera.
pSivida's already-FDA approved products include Retisert for the treatment of
posterior uveitis, an autoimmune condition characterized by inflammation of the
posterior of the eye that can cause sudden or gradual vision loss; and Vitrasert
for cytomegalovirus retinitis, a blinding eye disease that occurs in individuals
with advanced AIDS. Both of these are licensed to Bausch & Lomb.
It is developing a Latanoprost product, an injectable, bioerodible drug delivery
implant in Phase I/II dose-escalating study for the treatment of glaucoma and
ocular hypertension; a Posterior Uveitis product candidate expected to start
pivotal clinical trials shortly; its BioSilicon technology system, which is
nano-structured porous silicon designed for use as a drug delivery platform and
can deliver smaller molecules; and Tethadur, which utilizes BioSilicon to
deliver biologic molecules, including peptides and proteins. It has strategic
collaborations with Bausch & Lomb Incorporated; Alimera Sciences , and Pfizer
Inc.(NYSE:PFE).
PSDV's lead implant treatment is Iluvien, which is licensed to Alimera. The deal
with Alimera in terms of outside The United States includes 20% net profits on a
country by country basis and pSivida has full audit rights. If Alimera decides
to partner out the European commercialization then PSDV is entitled to 33
percent of any upfront and or milestone payments and 20 percent of whatever
Alimera gets in royalties.
We wrote an article on Alimera that covered the EU approval catalyst that was
supposed to occur at the end of Q2, 2012. However, Alimera has now reported a
delay in this process and does not expect approval to be gained to at least
until later Q3. This certainly helped to throw off my projected short term price
target opinion for Alimera.
It seems to me PSDV may have more to gain from the European approval. PSDV might
get the bigger stock price percentage gain on the European approval news than
Alimera may receive.
As referenced in my Alimera article, the FDA rejected Iluvien on its first
attempt to gain approval, and issued a complete response letter (CRL) to
Alimera.
After further research into PSDV, I have discovered that Iluvien is the not the
product to be most optimistic about that PSDV is offering.
Tethadur could be the company's most valuable technology according to Dr. Paul
Ashton, with its potential to deliver proteins peptides and other small
molecules; particularly interesting for biosimilars and biobetters. Small
molecule based procedures are more cost effective thancostlier biologic methods.
pSivida's Tethadur Technology is a platform drug delivery system that relies on
nanostructuring to achieve optimal drug delivery. It can be used alone or in
combination with pSivida's other technologies. Tethadur has:
* Ability to provide long-term delivery of anti-bodies and other proteins
* High efficiency/capacity of drug loading
* Controlled nanostructuring can vary nanosized pores to accommodate different
molecule sizes
* Fully bioerodible over range of time periods
Unlike most polymer-based drug delivery systems, the manufacture of Tethadur
does not require complex chemistry and the final product is pure silicon
irrespective of the delivery characteristics imparted by the nanostructuring
process.
Tethadur distinguishes itself from other delivery systems by its heat and
radiation stability, simplifying the manufacturing and sterilization process.
pSivida is the kind of small cap bio I look for; grossly undervalued based on
its technology platform and competent management.
The current management team eliminated $40 million in toxic debt inherited from
the Australian management predecessors. I stress this over and over: The most
important factor on success and/or failure of a small cap company is its
management's ability to execute. Hype aside, good products mean nothing if
management cannot execute correct business practices.
Money management, deal making, position leverage, communication with insurance
companies, and other factors can and will determine a great deal of the
company's success or lack thereof. I have given the prior example of Dendreon
Corporation's (NASDAQ:DNDN) Provenge, an effective treatment for prostrate
cancer, yet insurance companies were not in an effective loop to fully
understand the cost of the drug. Dendreon stock went on a wild ride all over the
place, from $5 a share all the way up to $57+ a share, only to fall back below
$8, mainly because of management's lack of proper communication. This was most
unfortunate, because Dendreon posesses great technology to make a real
difference in the lives of many patients not only suffering from prostate
cancer, but other forms of cancer as well
Should pSivida be selling for a price of around $2.25 a share currently?
The full, in-depth report by BioMedReports' contributor Scott Matusow which
examines the market moving potential of PSDV is now available at:
http://www.biomedreports.com/2012062798494/psivida-small-cap-ophthalmology-
based-biotech-positioned-for-long-term-growth.html
Healthcare investors and Biotech traders interested in accessing BioMedReports'
new complete database of clinical trials and upcoming FDA and world-wide
regulatory decisions which can be used to make more profitable trades and see
upcoming catalysts can go to:
http://biomedreports.com/fdacal.html
News developments and live healthcare sector updates are available constantly
via twitter at: http://twitter.com/BioMedReports
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