Antares Pharma Inc (ATRS): A Critical Look

Page 1 of 2

Recently, I enjoyed an article contributed by Adam Feuerstein (“AF article”) regarding Antares Pharma Inc (NASDAQ:ATRS) and its transformational product Otrexup. Here, I would like to present my views on the following items debated in the AF article: (1) sufficiency of data submitted to FDA, (2) marketability and sales of Otrexup, and (3) Antares Pharma Inc (NASDAQ:ATRS)’s market capitalization and its buyout potential.

Otrexup is a drug-device combination currently seeking FDA approval to become the first and only self-injectable methotrexate (MTX) device that can be used by rheumatoid arthritis (RA) patients at home. I refer interested readers to my previous article on Otrexup for a very detailed analysis.

Sufficiency of data submitted to FDA

AF article states that very little data have been presented and published by Antares Pharma Inc (NASDAQ:ATRS) on Otrexup. Since Otrexup is a drug-device combination product, its regulatory pathway for approval is managed by the Office of Combination Products, or OCP, division of the FDA.

OCP issued a guidance to clarify the data requirements for injector drug-device combinations seeking approval. According to the OCP guidance the applicant needs to submit data showing that the intended user group can safely and effectively use the injector. Antares Pharma Inc (NASDAQ:ATRS) submitted data from its “Human Factors Usability” and “Actual Human Use” studies.

Furthermore, if the injector is prefilled with a certain drug, OCP requires a pharmacokinetics study comparing the new injector to an approved route of delivery. Note that Otrexup changes the route of injection from intra-muscular (IM) to subcutaneous (SC). Antares conducted two pharmacokinetic studies to satisfy this additional requirement by comparing Otrexup against oral administration and IM injection.

OCP also encourages meetings to clarify case-specific data requirements. Antares Pharma Inc (NASDAQ:ATRS) had numerous meetings with OCP: 2011 meeting to confirm regulatory pathway, pre-submission meeting in 2012, and mid-cycle review meeting in 2013, all of which went smoothly.

Additionally, Antares submitted the results of numerous European clinical studies showing the benefits of subcutaneously injected MTX over oral administration, as supporting evidence. Note that, SC injection of MTX has been already approved and widely used in Europe and Canada.

Marketability and sales of Otrexup

AF article states that Antares is likely to face skepticism from all sides: “Doctors won’t have any efficacy data on Otrexup so may not rush to prescribe. Insurance companies could be slow to accept Otrexup”.

I completely disagree. Antares as well as many European clinical studies (see slide 10) established that SC injection has better efficacy than oral forms, as the systemic bioavailability of MTX is higher especially at higher doses. Antares Pharma Inc (NASDAQ:ATRS) already referenced such studies in their FDA application.

Better efficacy is not the only reason for superiority of Otrexup over oral tablets. European studies also established that since oral tablets have to go through gastro-intestinal tract, they cause many more side effects and the amount of oral medication that is absorbed into the blood varies greatly among patients, i.e., notorious “variable absorption” problem.

Secondly, Otrexup will grab massive market share from IM injections for many reasons as detailed in my article. Insurance companies will happily switch patients from IM injection to Otrexup to eliminate the cost of weekly office visits.

Thirdly, insurance companies would be interested in keeping patients longer on MTX before switching to expensive biologics, which can be achieved by the higher systemic bioavailability of MTX, thanks to Otrexup.

Antares’s market capitalization

After raising questions about data quality and marketability of Otrexup, AF article states that Antares’s market cap already exceeds $500 million. Market cap of Antares has been the biggest bear argument, i.e., 23 million in sales with half a billion in market cap sounds like over-valuation.

Bears fail to realize that a savvy investor doesn’t buy Antares for its current sales, but rather its future billion dollar revenue potential driven by Otrexup, testosterone injector, three marketed products, and eight other pipeline products. Their Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) partnership alone is developing drug-device combination products worth $3 billion in US sales. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is familiar with the superiority of Antares injectors, especially when selling highly generic drugs in competitive markets, e.g., Teva increased its sales of human growth hormone from $20 million to $100 million after switching to Antares’s injector.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!