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Navidea Biopharmaceuticals (NAVB) May Double in 2013

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Although shares of Navidea Biopharmaceuticals Inc (NYSEAMEX:NAVB) are relatively unchanged over the trailing-12-month period, ask shareholders and they’d probably consider Navidea’s performance a major disappointment.

That disappointment stems from a complete response letter, or CRL, received in September for the company’s lead diagnostic candidate, Lymphoseek. In that CRL, the Food and Drug Administration noted that there weren’t any problems with Lymphoseek’s efficacy or safety, but there existed areas that needed addressing with regard to its third-party manufacturer. Following the resubmission of Lymphoseek to the FDA two months ago, I believe now is the time to seriously consider an investment in Navidea for a number of reasons.

Cardinal Health, Inc.To begin with, the technology is not only life-changing, but it’s a marked improvement from what’s already on the market. In simple terms, Lymphoseek is an injectable agent used in external lymph-node imaging and intra-operative lymphatic mapping, or ILM, procedures to help physicians determine which lymph nodes are infected with cancer and which aren’t. Based on numerous comparative trials, Pharmalucence’s sulfur colloid injection produced considerably more false-negative responses than Lymphoseek, and is tainted by longer waiting times and site injection pain, as well as more significant adverse events like hypersensitivity and anaphylaxis. Lymphoseek offers uniform preparation and minimal false-negative responses, and it dramatically improved the adverse event profile.

Another important aspect you have to consider is the nature of the CRL — which was based on manufacturing, not efficacy or safety. Manufacturing snags are actually quite common these days, and rarely do they preclude a drug or diagnostic from eventual approval. MAP Pharmaceuticals Inc. (NASDAQ:MAPP)‘ inhaled migraine medication Levadex and Alexza Pharmaceuticals, Inc. (NASDAQ:ALXA)‘ inhaled antipsycholtic drug Adasuve were both rejected because of manufacturing deficiencies. For MAP, its CRL was based on manufacturing process controls like product specifications and justification of process controls; however, its PDUFA date is rapidly approaching. In Alexza’s case, it was manufacturing deficiencies in its Mountain View, Calif., facility that pushed back Adasuve’s FDA approval from what would have been May 2012 all the way to late December.

The approval process may not appear smooth, but I’d project that an approval is coming at some point within the next year for Lymphoseek. Remember, as well, that Navidea has also submitted a Marketing Authorization Application with the European Medicines Agency.

Navidea’s commercial partnerships with Cardinal Health, Inc. (NYSE:CAH) can’t be overlooked, either. Cardinal Health will ultimately be in charge of Lymphoseek’s pricing — probably a smart move on Navidea’s part — and has the pharmacies and manufacturing capabilities to begin commercial production within weeks of a U.S. approval.

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