Palatin Technologies, Inc. (NYSEMKT:PTN) is circling up to be one of the market’s most undervalued and underestimated stocks this year, and could very well knock its competition out of the water come 2018. Specifically, its key peptide drug candidate Bremelanotide (brand name: Rekynda), designed to treat hypoactive sexual disorder in pre-menopausal women could be a game-changer. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and its foray into the market with Sprout Pharma-acquired drug Addyi, hailed as “the female Viagra” better watch out.
Let’s take a closer look at the three leading reasons to invest in Palatin:
Palatain’s Rekynda Will Trounce Valeant’s Addyi
Palatin’s Rekynda is categorically better than its competitor, Valeant’s Addyi (flibanserin), despite VRX’s head start. As it turns out, VRX’s “female Viagra” has far from been the saving grace for the female community of patients afflicted with sexual disorder, considering its black box warning for risks of severe hypotension and syncope for those who combine Addyi with alcohol. Considering Addyi is a chronic medication, meant to be taken daily to be effective, this would put the women Addyi targets between the ages of 18 and 44, women who likely enjoy indulging in even the occasional bottle of red wine, at risk.
Before Addyi sauntered into the market, the FDA had yet to approve any treatments. It will not be soon before long that Addyi has to square off against Rekynda, the 2.0 version of Viagra’s female counterpart- one that does not have to be taken daily, works within 30 to 60 minutes of taking the medication, and can be taken as-needed. Rekynda’s design enables it to be effective for about 8 hours following a given dose.
Meanwhile, as PTN’s drug passes through clinical tests and hurdles, we already know alcohol interaction will not stand in the way of the drug’s success. Last year, Rekynda’s Phase 1 trial revealed it was generally well-tolerated without serious adverse events from alcohol use interaction. Palatin CEO and President Dr. Carl Spana at the time cheered, noting that the positive results of the alcohol interaction study should more importantly act as a pivotal check mark for the FDA who requires alcohol interaction studies before clearing a drug for approval.
Furthermore, the women who take hormonal birth control also place themselves at greater risk for serious complications when adding Addyi into the mix. For a drug that must be taken daily, with prescriptions that come with a costly price tag of $800 per month, those dollars can start to add up for patients.
There are those who are bearish on PTN simply because of flaws they point out in rival Addyi. Yet, one thing is for certain: you cannot equate Addyi’s failings with Rekynda’s potential to succeed.
Massive Market Potential Waiting in the Wings
Though Rekynda is still in trials, once the libido drug makes its launch into the world, it will be cracking a market worth billions and billions of dollars across the globe. Especially taking under account the drug’s competitive edge over the only other horse in the race, Addyi with all of pitfalls, Palatin could capture the largely untouched kingdom of market potential.
It is estimated that roughly 40% of women suffer from female sexual dysfunction, i.e. hypoactive sexual desire disorder. Yet, barely any of this percentage have sought out medical attention, likely due to the vastly limited options available. When you have an option like Addyi, which can poorly impact blood pressure and interacts harmfully with alcohol, women might be left feeling the one solution out there is not worth the price they have to pay. Yet, with a better prospect like PTN’s Rekynda, women could start flocking to their pharmacies in the near future. If Palatin can issue an even more attractive price than its rival, once Rekynda is unleashed to the market, it could rake in multi-billion dollar gains, which would subsequently send shares shooting through the roof.
Almost at the FDA Approval Finish Line with Sturdy Cash Flow
Palatin’s answer to women with low sexual desire also appears to be on a clinical track towards garnering a green light from the FDA. Particularly on back of the biotech firm impressing investors back in November with the libido drug achieving both co-primary endpoints in its Phase 3 study in the indication of hypoactive sexual desire disorder, regulatory approval could be well under way. It is anticipated that PTN could file for an NDA for Rekynda by the first quarter of 2018, with open label extension study results to be completed by the middle of this year.
Especially following the biotech firm’s most recent quarterly print, which beat consensus expectations by just a hair, and an update from the management team indicating confidence in capital through at least the middle of next year, the firm appears to be in solid shape. After PTN’s licensing agreement established with AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), where in exchange for AMAG gaining exclusive domestic rights to market Rekynda, PTN in turn added an upfront payment of $60 million, $25 million in R&D reimbursement, up to $80 million in regulatory milestones, and up to $300 million in sales milestones coupled with 10% royalty revenues, PTN’s scope of cash will cover the path from pipeline to FDA approval.
Keep your eyes peeled to Palatin. There is strategic buying opportunity in these shares, and it could be wise to invest sooner rather than later when Rekynda hits a home run with clinical and commercial success.
TipRanks analytics exhibit PTN as a Buy. Based on 2 analysts polled by TipRanks in the last 3 months, both are bullish on Palatin stock. The 12-month average price target stands at $3.75, marking a nearly 914% upside from where the stock is currently trading.