Biodel Expecting To Release Top-Line Data Soon As Investors Take Notice Print E-mail
By Scott Matusow   
Tuesday, 30 July 2013 10:33

Going long ahead of certain biopharma catalysts have proven to be a very sucessfull trade this year, especially with small cap biopharmas, as  many small cap companies have seen large upside moves.

Just recently, we wrote on Astex Pharma (NASDAQ: ASTX) when the stock was trading at a little over $4.70 a share. Astex has a strong catalyst coming up for its drug, SGI-110.

The data for Astex to be released is from a randomized Phase II study of the drug in MDS and AML patients. 2 points of Data released, the first at the European Society for Medical Oncology (ESMO) in late September and the second, at the American Society of Hematology conference in December.

Since our article release, traders and investors have bet the stock up to a recent high of $5.75 on July 17th.

Biodel (NASDAQ: BIOD) is expecting top-line Phase II data for BIOD-123 to be released in the third quarter 2013. With the market for these products estimated to be about $10 billion in value, good results for Biodel's product would be a major step for the company and serve as a top-notch catalyst for biotech investors.

Biodel chose Eli Lilly's (NYSE: LLY) Humalog as its comparator for BIOD-123 and in Phase I trials has shown very positive results. BIOD-123 showed a better pharmacokinetic profile (PK) than Humalog and an improvement in injection site tolerability -- Humalog (along with Humilin) brings in yearly sales for Lilly of over $3.5B.

After  successful Phase I data, Biodel began a Phase II trial, with results expected in the third quarter 2013, as Biodel CEO Dr. Errol De Souza stated in the second quarter 2013 financial results presentation:

“We are pleased to report progress across the breadth of our portfolio of pipeline product candidates. Enrollment is fully complete in our Phase 2 clinical trial of RHI-based ultra-rapid-acting insulin BIOD-123 and more than half of the subjects have finished the study, as we remain on track to report top line data in the third calendar quarter of 2013. On the research front, our new concentrated insulin candidate BIOD-531 has demonstrated an ultra-rapid-acting onset and basal duration profile in diabetic swine which could offer medical practitioners a novel therapeutic to improve prandial coverage while maintaining basal coverage in both severely insulin resistant patients and patients who use premixed insulins.”

(click to enlarge) 

The above chart shows accumulation and price action very good here, as evident by the higher lows and higher highs the channel is making.

The price target opinion is at least $6 in the next 6 weeks or so into the catalyst event.

With all the buzz associated with Mannkind (NASDAQ: MNKD) lately surrounding its Phase III Diabetes inhaler Afrezza, Biodel seems poised to take advantage of this, as both companies are seeking to offer treatments in the same segment – fast acting insulin.

With a market cap coming of around $90M, and a well-supported recent public offering at $4.35, Biodel looks to be the next big price mover among small cap biopharmas, as news spreads and institutions roll money into the name. Considering that Humalog, which as mentioned, (along with Humilin) brings in yearly sales for Lilly of over $3.5B, it seems to us that a $90M market cap is a very under-speculated price tag.

Disclosure: Long BIOD

Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky -- always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.


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