I trashed Anesiva management for not keeping investors informed of its problems with manufacturing Zingo [See Anesiva (ANSV) Drops Zingo].
Yet I felt the market reaction to the discontinuance of Zingo was overdone. Why? Because the majority of the future value of the company was always in the potential of Adlea.
Adlea a simple, long-term painkiller that is dripped into surgical wounds. It appears to have no side affects and keeps pain down for weeks. It allows patients to cut back on their use of morphine. The FDA is reputed to be eager to have a non-addictive, surgical wound specific analgesic on the market.
Adlea has had a lot of clinical trials now, including Phase III trials. Overall it has done well, always showing pain reduction, but in some specific uses or test runs not quite hitting its endpoints. The latest test results [See Anesiva Adlea press release] met the endpoints for total knee replacement surgery.
Adlea's problem now is that they ran through their cash after they got FDA approval for Zingo. So they don't appear to have the cash required to get Adlea to market. They need a partner, because in this market you can't issue new stocks or bonds even if you have a blockbuster winner like Adlea sitting in your lap. Another possibility would be a buyout from a larger pharma company.
Sometimes other companies are willing to let a winner die on the vine, either to prevent competition or to pick it up even cheaper later. There's no telling how this would play out. Normally I'd say Anesiva (ANSV) is worth large multiples of its current market capitalization, but that depends on money coming from somewhere to get Adlea approved and marketed.
More:
My Anesiva page
www.anesiva.com
Keep Diversified!
Showing posts with label anesiva. Show all posts
Showing posts with label anesiva. Show all posts
Tuesday, December 16, 2008
Tuesday, November 11, 2008
Anesiva (ANSV) Drops Zingo
Just a couple of weeks ago I was optimistic about Anesiva and the rollout of Zingo, a quick-acting pain killing system for children getting IV punctures. I was able to verify that several hospitals were using the treatment and that patient response was good.
Yesterday, buried in a press announcement about Adlea, an Anesiva's analgesic under development, Anesiva said they would discontinue Zingo. Here's what they said:
"Anesiva has determined that it will cease further commitments to support Zingo commercialization as a result of continued manufacturing challenges and the need to recall product in the field due to a potential non-safety related shelf life issue from a lot of unreleased product. Anesiva plans to seek a device-oriented partner for this asset. The company will also seek to license rights to the underlying drug delivery technology to third parties for use with other medications."
Well, sometimes things go wrong, that is why my investment motto is "keep diversified." However, sometimes management is not being entirely honest with investors or analysts (and there are cases where they have even tried lying to the FDA).
On May 8, 2008 management said that manufacturing and packaging issues were resolved [See my Anesiva (ANSV) Analyst Conference Summary for Q2 2008] . As far as I know, yesterday was the first time the issue was raised since that time.
Anesiva stock is virtually worthless today, but that might be a mistake. Adlea is also a promissing therapy. However, now I don't trust management. They should have kept investors informed of problems as they happened. True, that might have knocked the stock price down earlier, but at least people would be investing, or selling, based on good information and management might have kept investors' trust.
Zingo, too, should be worth something in the hands of competent managers. Now it can be bought for a song, or maybe its competitors will just arrange for it to die.
Now more than ever ...
Keep diversified. And be more cautious about development stage drug companies, even if they have an FDA approval for a therapy.
more data:
Anesiva
Yesterday, buried in a press announcement about Adlea, an Anesiva's analgesic under development, Anesiva said they would discontinue Zingo. Here's what they said:
"Anesiva has determined that it will cease further commitments to support Zingo commercialization as a result of continued manufacturing challenges and the need to recall product in the field due to a potential non-safety related shelf life issue from a lot of unreleased product. Anesiva plans to seek a device-oriented partner for this asset. The company will also seek to license rights to the underlying drug delivery technology to third parties for use with other medications."
Well, sometimes things go wrong, that is why my investment motto is "keep diversified." However, sometimes management is not being entirely honest with investors or analysts (and there are cases where they have even tried lying to the FDA).
On May 8, 2008 management said that manufacturing and packaging issues were resolved [See my Anesiva (ANSV) Analyst Conference Summary for Q2 2008] . As far as I know, yesterday was the first time the issue was raised since that time.
Anesiva stock is virtually worthless today, but that might be a mistake. Adlea is also a promissing therapy. However, now I don't trust management. They should have kept investors informed of problems as they happened. True, that might have knocked the stock price down earlier, but at least people would be investing, or selling, based on good information and management might have kept investors' trust.
Zingo, too, should be worth something in the hands of competent managers. Now it can be bought for a song, or maybe its competitors will just arrange for it to die.
Now more than ever ...
Keep diversified. And be more cautious about development stage drug companies, even if they have an FDA approval for a therapy.
more data:
Anesiva
Tuesday, October 23, 2007
Biotechnology Insights: Anesiva Goes Commercial
It has been a busy couple of weeks for me. I've thought of doing blog entries on Biogen-Idec (BIIB), AMD, and Gilead (GILD), but have not found the time. I still have one more installment in my Picking a Biotechnology stock series (but I went ahead and bought Gilead). But I think the most interesting, untold story is about Anesiva.
I would not know about Anesiva (ANSV) except that I invested in a stock called Corgentech a few years ago. At the time Corgentech was having problems with it drug development program, but had a great deal of cash left over from its stock offerings of more optimistic times. A different company, focused on pain drugs and funded by venture capitalists, was looking for a stock listing and more cash for its development plans. The two companies merged and the new company was called Anesiva. This was in 2006.
Anesiva's most advanced therapy was for reducing the pain a blood draws. It was actually a simple idea: take a well-known safe and effective drug, lidocaine. Make it into a fine powder and put it in a single-use device that uses a puff of gas to embed the powder in the skin in a circular patch. Within about 1 minute the skin is numbed. The patient feels little or no pain when blood is drawn or an IV needle is inserted. The treatment is now called Zingo.
Back then most analysts dismissed Anesiva with the belief that it would not get approval for Zingo from the FDA. They argued that even clinical studies proved Zingo to be safe and effective, the FDA just was not keen on pain killers. They pointed to a record of failure of other pain drugs to be approved by the FDA. I think the real problem for the major brokerage-connected analysts was that Anesiva did not do an IPO, so no one prestigious had got the fees that induce Wall Street to hype companies to investors.
The Phase III studies of Zingo came in with impressive results. The first studies were done for the "pediatric market," which is to say for children. National health guidelines have been adopted to reduce pain and anxiety for children in medical settings. The FDA not only approved Zingo for children; it approved it early. Even Anesiva seemed surprised.
And the stock price is, yes, down. As far as I know, no major brokerage house recommends Anesiva stock. The consensus now: no one is going to pay $15 to save their child from pain, and even if the parents would, the HMO's won't.
But HMO's are only careful with money, not stupid. Time is money, and getting kids to accept procedures without a struggle saves staff time. It also means happier customers.
Anesiva is working to get high-volume production of Zingo units underway. They have a sales staff that is working on getting hospitals to adopt the therapy. There is a group of pediatric nurses that is tired of being seen by children a harbingers of pain. The nurses are advocating for widespread use of Zingo for children.
Commercial sales of Zingo probably won't start until Q2 2008, and like all ramps, may get off to a slow start. Meanwhile the Zingo Phase III trial for adults has been completed with good results. It will take a while for Anesiva to submit the data to the FDA, but approval for use with adults should come in 2008. In this kind of situation we have what is called a label-expansion. All the FDA needs to do is say that what can be given to children can be given to adults.
Just based on the Zingo story, Anesiva is a very undervalued stock. But there is another drug in the pipeline. It is called Adlea and it is used for surgical pain. Basically, Adlea is sprinkled in the affected area during surgery. It appears to relieve pain for 6 to 8 weeks after that. I am guessing that eventually it will become a standard surgical procedure. Because of the way the FDA works, you can't just ask for approval for surgery in general. Anesiva has been trying it out on a variety of procedures, notably knee surgery and bunion surgery. The great thing about Adlea is that is can reduce the need for full-body opioid painkillers. I think the FDA likes that idea.
Nothing is guaranteed in the stock market, but Anesiva is a pretty good bet. Even if the big brokerage houses delay a long time before recommending it, in the next two years sales are highly likely to ramp up and away.
As always, there are all kinds of risks, including the possible failure of doctors to adopt a new therapy. Anesiva, like any stock, should only be held a part of a portfolio balanced for risk.
Again, most sell-side analysts don't like Anesiva. Every time they have been proven wrong, they just find another reason to not like it. That is the main reason the stock price is such a bargain now.
More data:
Anesiva corporate Web site
I would not know about Anesiva (ANSV) except that I invested in a stock called Corgentech a few years ago. At the time Corgentech was having problems with it drug development program, but had a great deal of cash left over from its stock offerings of more optimistic times. A different company, focused on pain drugs and funded by venture capitalists, was looking for a stock listing and more cash for its development plans. The two companies merged and the new company was called Anesiva. This was in 2006.
Anesiva's most advanced therapy was for reducing the pain a blood draws. It was actually a simple idea: take a well-known safe and effective drug, lidocaine. Make it into a fine powder and put it in a single-use device that uses a puff of gas to embed the powder in the skin in a circular patch. Within about 1 minute the skin is numbed. The patient feels little or no pain when blood is drawn or an IV needle is inserted. The treatment is now called Zingo.
Back then most analysts dismissed Anesiva with the belief that it would not get approval for Zingo from the FDA. They argued that even clinical studies proved Zingo to be safe and effective, the FDA just was not keen on pain killers. They pointed to a record of failure of other pain drugs to be approved by the FDA. I think the real problem for the major brokerage-connected analysts was that Anesiva did not do an IPO, so no one prestigious had got the fees that induce Wall Street to hype companies to investors.
The Phase III studies of Zingo came in with impressive results. The first studies were done for the "pediatric market," which is to say for children. National health guidelines have been adopted to reduce pain and anxiety for children in medical settings. The FDA not only approved Zingo for children; it approved it early. Even Anesiva seemed surprised.
And the stock price is, yes, down. As far as I know, no major brokerage house recommends Anesiva stock. The consensus now: no one is going to pay $15 to save their child from pain, and even if the parents would, the HMO's won't.
But HMO's are only careful with money, not stupid. Time is money, and getting kids to accept procedures without a struggle saves staff time. It also means happier customers.
Anesiva is working to get high-volume production of Zingo units underway. They have a sales staff that is working on getting hospitals to adopt the therapy. There is a group of pediatric nurses that is tired of being seen by children a harbingers of pain. The nurses are advocating for widespread use of Zingo for children.
Commercial sales of Zingo probably won't start until Q2 2008, and like all ramps, may get off to a slow start. Meanwhile the Zingo Phase III trial for adults has been completed with good results. It will take a while for Anesiva to submit the data to the FDA, but approval for use with adults should come in 2008. In this kind of situation we have what is called a label-expansion. All the FDA needs to do is say that what can be given to children can be given to adults.
Just based on the Zingo story, Anesiva is a very undervalued stock. But there is another drug in the pipeline. It is called Adlea and it is used for surgical pain. Basically, Adlea is sprinkled in the affected area during surgery. It appears to relieve pain for 6 to 8 weeks after that. I am guessing that eventually it will become a standard surgical procedure. Because of the way the FDA works, you can't just ask for approval for surgery in general. Anesiva has been trying it out on a variety of procedures, notably knee surgery and bunion surgery. The great thing about Adlea is that is can reduce the need for full-body opioid painkillers. I think the FDA likes that idea.
Nothing is guaranteed in the stock market, but Anesiva is a pretty good bet. Even if the big brokerage houses delay a long time before recommending it, in the next two years sales are highly likely to ramp up and away.
As always, there are all kinds of risks, including the possible failure of doctors to adopt a new therapy. Anesiva, like any stock, should only be held a part of a portfolio balanced for risk.
Again, most sell-side analysts don't like Anesiva. Every time they have been proven wrong, they just find another reason to not like it. That is the main reason the stock price is such a bargain now.
More data:
Anesiva corporate Web site
Friday, August 17, 2007
Anesiva Zingo Approved by FDA
Today Anesiva announced that the FDA approved its Zingo (TM) product, which painlessly injects a tiny amount of analgesic into the skin. Within two to three minutes a needle puncture can be made without the patient feeling pain (or feeling noticeably less pain). Anesiva specifically sought and got approval for using this on children. Health guidelines now say that children should be given pain relief before needle insertions, but that seldom happens because existing therapies take 20 to 30 minutes to act.
In addition the company, in an analyst conference this morning, said that it is near completion of enrollment in its study of Zingo for adults. This trial could be concluded soon (in industry terms; it is not like a cancer trial where you may have to wait a couple of years to get meaningful results). If the results are positive, as I expect they should be, Anesiva can file a supplementary application which, if approved, will give the FDA's blessing to using Zingo for adults.
This is going to be a big market. I know I don't like pain when a blood sample is drawn; I want my Zingo. Anesiva estimates the price (I'm assuming this is their selling price, not the price your hospital will charge you) will be between $12 and $16. Multiple that by the number of needle sticks for drug injections and blood draws and etc., subtract out the number of masochists and manly men who will insist on feeling the pain, and you get a number. A pretty darned big number.
Of course it will take a while to get to that big number. Sales of Zingo are likely to start in 2008.
Anesiva has run through a lot of money developing Zingo and its other drug candidate, Adlea (TM), for surgical and other internal pain. However, it still had $62.8 million in cash at the end of Q2. It has already spent a fair amount to get ready to manufacture and sell Zingo in the hopes it would be approved. While it is possible that it might have to go out for more cash before Zingo revenues flow in, Anesiva is likely to be able to do that without diluting the stock.
Partnership agreements are being discussed. Anesiva is seeking a partnership in the U.S. to cover health care providers that would not be efficient to approach with its own organization. It is also seeking a partnership in Europe. That is contingent on approval by European authorities. The current thinking of management is that they will wait until the get the adult study done before applying in Europe, rather than doing it in two stages as they have done in the U.S. It is very possible one or the other of these partnership agreements could include some cash up front for this potentially lucrative franchise.
For those who have not been following the company, let us just note (without hubris) that a number of biotechnology analysts believed that Anesiva would not get approval for Zingo. I am not against critical analysts; more often the problem with analysts, especially sell-side Wall Street analysts, is that they are not critical enough. Their argument was not without reason: they believe pain drugs are not easily approved by the FDA. They neglected two more important facts: Zingo is not an opioid of addictive in any way, and the data from the studies was really solid. There was no clear basis for failing to approve Zingo.
One other potential source of revenue mentioned by management is the application system itself. Now that the device, as well as the drug, has been approved, the device could be used to deliver other drugs, and the FDA would probably feel very comfortable with that. Anesiva hopes other companies will license this drug delivery device. I don't know that I would put numbers on that scenario; if it happens, I would treat any revenue as a pleasant upside surprise.
More data:
My Anesiva page (with links to analyst conference summaries)
Anesiva investor relations page
Anesiva home page
My Biotechnology Research Help page
In addition the company, in an analyst conference this morning, said that it is near completion of enrollment in its study of Zingo for adults. This trial could be concluded soon (in industry terms; it is not like a cancer trial where you may have to wait a couple of years to get meaningful results). If the results are positive, as I expect they should be, Anesiva can file a supplementary application which, if approved, will give the FDA's blessing to using Zingo for adults.
This is going to be a big market. I know I don't like pain when a blood sample is drawn; I want my Zingo. Anesiva estimates the price (I'm assuming this is their selling price, not the price your hospital will charge you) will be between $12 and $16. Multiple that by the number of needle sticks for drug injections and blood draws and etc., subtract out the number of masochists and manly men who will insist on feeling the pain, and you get a number. A pretty darned big number.
Of course it will take a while to get to that big number. Sales of Zingo are likely to start in 2008.
Anesiva has run through a lot of money developing Zingo and its other drug candidate, Adlea (TM), for surgical and other internal pain. However, it still had $62.8 million in cash at the end of Q2. It has already spent a fair amount to get ready to manufacture and sell Zingo in the hopes it would be approved. While it is possible that it might have to go out for more cash before Zingo revenues flow in, Anesiva is likely to be able to do that without diluting the stock.
Partnership agreements are being discussed. Anesiva is seeking a partnership in the U.S. to cover health care providers that would not be efficient to approach with its own organization. It is also seeking a partnership in Europe. That is contingent on approval by European authorities. The current thinking of management is that they will wait until the get the adult study done before applying in Europe, rather than doing it in two stages as they have done in the U.S. It is very possible one or the other of these partnership agreements could include some cash up front for this potentially lucrative franchise.
For those who have not been following the company, let us just note (without hubris) that a number of biotechnology analysts believed that Anesiva would not get approval for Zingo. I am not against critical analysts; more often the problem with analysts, especially sell-side Wall Street analysts, is that they are not critical enough. Their argument was not without reason: they believe pain drugs are not easily approved by the FDA. They neglected two more important facts: Zingo is not an opioid of addictive in any way, and the data from the studies was really solid. There was no clear basis for failing to approve Zingo.
One other potential source of revenue mentioned by management is the application system itself. Now that the device, as well as the drug, has been approved, the device could be used to deliver other drugs, and the FDA would probably feel very comfortable with that. Anesiva hopes other companies will license this drug delivery device. I don't know that I would put numbers on that scenario; if it happens, I would treat any revenue as a pleasant upside surprise.
More data:
My Anesiva page (with links to analyst conference summaries)
Anesiva investor relations page
Anesiva home page
My Biotechnology Research Help page
Monday, January 8, 2007
Anesiva 4975 Plan Revealed
Anesiva (ANSV) announced today that it completed a successful meeting with the FDA. Based on FDA feedback, they released a plan for Phase 2 and 3 trials for their 4975 compound, which is a long-term, non-opioid pain reliever.
But first, be aware that I own stock in ANSV and think investors should consider all stocks in biotech companies that have not actually brought drugs to market to be very risky investments. Also, at least short term, ANSV stock price is much more dependent on whether the FDA approves Zingo, a local anesthetic that has completed its Phase 3 trials, than on 4975.
4975 is a formulation of capsaicin, a TRPV1 agonist that blocks pain transmission in nerve cells. It acts for weeks without the ugly side effects of the current drugs of choice, opioids. During surgery it is dripped into a wound. Other than that the surgery is completed as usual. Because of the way drugs are approved at the FDA, companies can't just apply to have a drug approved for surgeries in general. So after doing a series of Phase 2 trials on different types of surgical pain, Anesiva guys met with the FDA and came up with this plan to get approval for four indications, involving 4 Phase 2 trials: hip replacement surgery, knee replacement surgery, arthroscopic should surgeries, and for osteoarthritis (in absense of surgery).
But clearly they are concentrating on knee replacement surgery, the only indication for which they announced a planned Phase 3 trial, beginning in the second half of 2007. Phase 2 trials in all four indications are to begin in the first half of 2007.
This is great news for current investors. At the same time FDA approval is not guaranteed. If the trials are successful it would be 2008 before approval could be granted. There were 470,000 knee replacement surgeries in the USA in 2005, and if that program goes well then getting approval for other types of surgery and long term pain should be relatively easy.
Meanwhile we anxiously await approval on Zingo, which provides immediate, skin level anesthetization and is designed to reduce pain for needle insertions. My understanding is that thumbs up or down from the FDA should come in the first half of this year.
To learn more see my summaries of Anesiva's quarterly analyst conferences.
But first, be aware that I own stock in ANSV and think investors should consider all stocks in biotech companies that have not actually brought drugs to market to be very risky investments. Also, at least short term, ANSV stock price is much more dependent on whether the FDA approves Zingo, a local anesthetic that has completed its Phase 3 trials, than on 4975.
4975 is a formulation of capsaicin, a TRPV1 agonist that blocks pain transmission in nerve cells. It acts for weeks without the ugly side effects of the current drugs of choice, opioids. During surgery it is dripped into a wound. Other than that the surgery is completed as usual. Because of the way drugs are approved at the FDA, companies can't just apply to have a drug approved for surgeries in general. So after doing a series of Phase 2 trials on different types of surgical pain, Anesiva guys met with the FDA and came up with this plan to get approval for four indications, involving 4 Phase 2 trials: hip replacement surgery, knee replacement surgery, arthroscopic should surgeries, and for osteoarthritis (in absense of surgery).
But clearly they are concentrating on knee replacement surgery, the only indication for which they announced a planned Phase 3 trial, beginning in the second half of 2007. Phase 2 trials in all four indications are to begin in the first half of 2007.
This is great news for current investors. At the same time FDA approval is not guaranteed. If the trials are successful it would be 2008 before approval could be granted. There were 470,000 knee replacement surgeries in the USA in 2005, and if that program goes well then getting approval for other types of surgery and long term pain should be relatively easy.
Meanwhile we anxiously await approval on Zingo, which provides immediate, skin level anesthetization and is designed to reduce pain for needle insertions. My understanding is that thumbs up or down from the FDA should come in the first half of this year.
To learn more see my summaries of Anesiva's quarterly analyst conferences.
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