Palatin Technologies, Inc. (NYSEAMERICAN: PTN) is having an incredibly rough start to the trading session with its stock price down more than 11% early on in the session. The declines may come as a surprise to most considering that the company announced the FDA approval of Vyleesi just yesterday.
Nonetheless, I believe that the drop in value, likely caused by a report from Adam Feuerstein, is creating an opportunity to get in on gains at a discount. Here’s what’s happening:
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PTN Stock Props Up Then Tumbles On Approval
Yesterday morning, Palatin Technologies announced that its drug candidate, Vyleesi has been approved by the FDA. The news led to an immediate and tremendous rise in value. That is, until the opening bell rang.
Once the opening bell sounded, the stock started to fall, making it to the red before lunch time and continuing downward through the session and the beginning of today’s session. As mentioned above, I believe that the declines represent an opportunity, but we’ll get to that in a second. First, why is it that the stock is falling?
Noted biotech expert, Adam Feuerstein weighed in on the approval with some seriously negative comments. In fact, he said that the FDA brought its bar down, nearly to the floor, in order to approve this treatment, acting on special interests.
I don’t believe this to be the case, nor do I prescribe to Feuerstein’s Stat News or his bearish views about many biotech companies. Nonetheless, he is a noted expert and when he says something, the market seems to listen. In my view, this is the only reason that the stock would be falling. However, for those PTN bulls out there, don’t worry, Mr. Feuerstein seems to be doing you a favor.
The Opportunity In The Making
The truth of the matter is that in multiple clinical trials, Vyleesi has proven to be effective, safe and well-tolerated. Moreover, the approval of the drug triggered a $60 million milestone payment from Amag Pharmaceuticals (NASDAQ: AMAG). Keep in mind, this is $60 million of up to $300 million that’s up for grabs in regulatory and commercial milestones.
Not to mention, moving forward, Amag Pharmaceuticals will be in charge of commercializing the treatment and covering the costs associated with the process while Palatin Technologies will be raking in tiered royalties.
Considering the fact that a large percentage of women develop sexual desire disorders that Vyleesi is meant to treat, I’m expecting for this to be a blockbuster drug. Moreover, AMAG and PTN have estimated that at its peak, annual sales of the drug will reach about a billion per year.
In my view, the approval of Vyleesi represents a tremendous opportunity for PTN to access milestone payments and royalties that will likely fund the continued development of candidates within its robust pipeline of products. At the end of the day, this is putting the financial foundation under the company that will allow it to see meaningful growth.
As such, the declines caused by the Feuerstein short report are doing nothing more than creating an opportunity. In my view, those who buy on the weakness will be paid off handsomely in the long run!
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What Do You Think?
Where do you think PTN stock is headed moving forward? Join the discussion in the comments below!
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Great information in this article. The short report seemed odd for several reasons. I mean when was the.last time you.heard the FDA get accused of “Getting it wrong?
Sounded more like sour grapes to me Either way, definitely buying opportunity. You nailed it.
Thanks, I couldn’t agree more!
We’ve seen many of these Day 1 short investor/media types. What they do is try to get attention by being an “edgy contrarian”. It’s just hot air and it is in fashion in today’s social media influencer world. Their goal is to try to push the stock down a little so their friends can short it, and then get in cheap. It’s a short term strategy. Now, in the long term is what matters. And what matters here is that post-menopausal women having a lack of desire in their marriage is a pretty common and real condition that shouldn’t be discounted or pushed to the side. There’s so many women like that. Just like there were so many men back in the day who had ED and no place to go to fix it before Viagra. Why shouldn’t women be afforded the opportunity to choose to help their health situation? Would folks prefer the women to suffer through things like divorce or strained marriage? Sex, I hate to say, is part of life and having a healthy sex life is actually really beneficial for marriages, families, mental health, and eventually the economy. If we have a world with less humans in distress and who are happier and more content with their sex life, then that is ultimately good for all. I’m no social justice warrior but I’ll never understand why something as simple and natural as sexual health in women is such a taboo topic. I remember when Viagra first came out, and it was a little shameful for men to talk about it. Yet it became a huge drug in terms of market and sales. So just because something is taboo or scary to talk about today, doesn’t mean times won’t change and people won’t eventually accept a better reality. In the near future, women “of a certain age” may start taking more control over their sex lives, and I think they will be better for it. Unfortunately, people hear the words “Female Viagra” and start telling jokes. Even though it’s almost 2020, some people are still afraid to talk about sex, or bodily functions. It’s kind of a joke to a lot of people. For example, many people might say “A shot of tequila might be cheaper, lol.”. While that’s a funny observation, it’s also never going to be more than a joke. Women who want to “feel again” have probably tried tequila, and maybe a lot more, in their own personal struggles, that we will never know about. In the long run this seems like a beneficial drug that can help a lot of women get their sex lives back, and restore a part of their lives that might have gone missing. According to the reports it seems like a safe medication, with minimal side effects, that can be taken relatively safely even when consuming alcohol. Anyone who is against that kind of medication profile is really not a friend of women’s health choices, their personal freedom, or the whole point of developing medicines to help people, in the long run.
I couldn’t have said it better myself, what a strong argument!!! Thanks for sharing!
The objections that Feuerstein made are easily refuted by anyone who reads the clinical studies and the interviews of many of the women who participated which were published in the Journal of Sexual Medicine. First, the autoinjector on-demand administrator was actually preferred by the women over a daily pill and was not a deterrent to staying on bremelanotide. Second, the effectiveness over a placebo was unequivocally confirmed by the trial with high statistical significance despite the somewhat subjective nature of survey questions. The high level of motivation of the participants and their desire to correct the stress caused by their chronic lack of libido may have heavily influenced the placebo recipients to report any suggestion of improvement. Even with this complexity the drug recipients were well above the placebo group in their endpoint scores.
Adam and others made much of the incidence of nausea but 13% of the participants simply took an anti-emetic like Zofran and avoided the problem. The other women who didn’t take Zofran had nausea but not enough to discourage them from continuing until they side effect disappeared after a few doses. The ones that dropped out could have take a Zofran and stayed in but declined.
As far as affordability, AMAG is essentially giving the first 4 pack of injectors away with a $0 copay and only a $99 copay for subsequent refills which is comparable to ED medications for men. They also have included a telemedicine link on the Vyleesi website so women can fill out a symptoms questionnaire and consult with a prescriber right on the website. This is in advance of the September shipping date so these are preorders. As of about a week ago they had over 500,000 hits on the website and 88,000 women who had filled out the diagnostic questionnaire. They don’t even need to see their regular doctor in most cases. This is very promising for overcoming any reluctance or embarrassment they might feel in at least trying this medication. In addition, some doctors may shortly be comfortable with off label prescriptions to postmenopausal or transitioning women who are not hypertensive and not on hormone therapy.
The market had made a huge bet that Vyleesi will suffer the same fate as Addyi but based on my research and the experience men and women have had with PT-141 bremelanotide worldwide I think they are missing a blockbuster opportunity. Time and earnings will tell who’s right.