Lipocine Inc (LPCN) Stock Is Now a “Show Me” Story

Odds of approval for LPCN's Tlando come May 8th? H.C. Wainwright's Oren Livnat says "extremely low," slicing his price target.


Lipocine Inc (NASDAQ:LPCN) shares have had all the air let out of them like a flat tire after the FDA’s second look at the biotech player’s twice-a-day oral testosterone asset TLANDO got a 13-6 veto AdCom vote blocking approval for Tlando. Ever since Wednesday’s outcome, shares have plummeted almost 48% in value. The FDA BRUDAC panel has since set a PDUFA date for May 8th for LPCN’s therapy designed to help restore normal testosterone levels in hypogonadal men.

Two summers prior, the therapy already suffered a rejection, but considering prospective oral testosterone replacement therapy (TRT) rival Clarus’ Jatenzo bore the brunt of a negative vote 10 to 9 on Tuesday, some bulls still had last hopes approaching Wednesday’s panel meeting.

What happened? The Tlando panel had rising worries circling the thoroughness (or lack thereof) a 24-hour ambulatory blood pressure trial and various panelists voiced concerns with a great deal of off-label TRT prescriptions on the loose today.

H.C. Wainwright Oren Livnat says odds are now no longer in Lipocine’s favor when it comes to Tlando’s May 8th PDUFA date, but for the time being, he is staying with the bulls.

Now angling for a much less high probability of success, taking 60% to 25%, the analyst maintains a Buy rating on LPCN but dials he price target down from $10 to $3, which implies a just under 67% upside from current levels. (To watch Livnat’s track record, click here)

Livnat offers some context, writing that the issues were neither “shocking,” nor should they stand as outright “deal-breakers;” and yet, the analyst explains, “we are concerned that the FDA seemed to be fishing for ‘no’ votes, reflecting a possible negative bias against approving new TRT, which was a risk we highlighted when recently assuming coverage. The FDA not only brought up the notion of a pre-approval ambulatory BP study requirement for the first time at the Adcom (after allegedly not suggesting it during SPA negotiations with Lipocine), but went so far as to tell panelists they should consider the prior day’s review of Clarus’s application, which did have such a study and showed a concerning BP increase (but which also seems to have a worse CV profile than Tlando in general).”

“So, odds of approval on the May 8 PDUFA are extremely low at this point, but we don’t think it prudent to downgrade the stock now with it trading just above the approximate $35M cash on hand, some potential for guidance on a reasonable pathway on or before the May 8 PDUFA date, and potential out-licensing of the interesting ‘1107 ‘oral Makena’ asset,” concludes the analyst, seeing a “‘show me’ story” from this point forward.

TipRanks shows a Wall Street leaning towards the bulls when it comes to Lipocine, meaning a lot of investors are gritting their teeth as the stock plunges. Based on 4 analysts polled in the last 12 months, 3 out of 4 are bullish on Lipocine stock with 1 remaining on the sidelines. Is the stock overvalued or undervalued by these analysts’ expectations? Consider that the 12-month average price target stands at $17.00, marking a whopping 844% upside potential.