Ohr Pharma: A Pure 2014 Catalyst Play With Large Potential Print
By Brian Wilson-Lead Contributor   
Monday, 11 November 2013 08:43
One of the biotechs of 2013 that continues to hold its ground is Ohr Pharmaceutical (NASDAQ: OHRP) – a company that is best known for its Squalamine eye drops which are being developed as a treatment for wet age-related macular degeneration (wet AMD). The Phase II trial for squalamine in this indication has recently completed enrollment, and data should be available in 2014Q2. The company is also developing squalamine as a treatment for ovarian cancer, and has another drug in Phase II trials to treat weight loss and tissue loss in cancer patients (cancer cachexia). The last drug candidate, Trodusquemine, is close to clinical development although the intended indication is not currently disclosed.

Ohr is a developmental biotech and is inherently risky, although we believe that the upside is significantly larger than the downside due to the sheer size of the wet AMD market and the commercial potential for squalamine eye drops given eventual FDA approval.

Another attractive trait about the company is its relatively low quarterly operating loss, which is roughly $950,000 per quarter according to the last three 10-Qs filed by the company. This is a nice figure for a company with three Phase II compounds in development. Also given about $6 M in cash, the company will have enough to operate smoothly into 2015. By then, there will be a lot of data available from the Phase II squalamine wet AMD trial. If successful, the company will be able to raise money for Phase III development with more favorable terms.

Squalamine & Wet AMD

Squalamine is a drug that inhibits something known as angiogenesis, which is the process of abnormal blood vessel formation. This process is extremely important in cancer, which is why many angiogenic inhibitors were originally developed as anticancer drugs. Abnormal blood vessel growth is also responsible for vision loss in wet AMD.

Squalamine, which inhibits a number of growth factors related to angiogenesis (VEGF, PDGF, bFGF), attempts to shut down the physiologic pathway that can lead to abnormal blood vessel growth in patients with wet AMD. A previous effort to make squalamine into an IV wet AMD drug resulted inconvenient dosing and limited efficacy, which gives Ohr Pharmaceutical an opportunity to tap this potential which a noninvasive eye drop formulation that can be used for wet AMD along with other angiogenesis inhibitor therapies.

The Big Catalyst of 2014

In the second quarter of 2014, Ohr expects to release interim data from the Phase II trial for Squalamine in the treatment of wet AMD. This data release should have efficacy and safety data for the 60 patients that had already been enrolled into the trial as of July 10th, 2013. Although other catalysts may be important, this event should have the most profound impact on share price in the first half of 2014. Investors who are trading Ohr should generally be focused on this event.

Going Forward

If the Phase II data is good, it’s not clear how high OHRP will soar although the reaction should be very positive due to the implications that positive Phase II data would have on squalamine’s development. The drug has received fast track status from the FDA, which means that the company can submit late-stage trial data to the FDA earlier. This suggests that the drug will be approved about four months earlier than normal.

Much more important is the commercial potential of squalamine eye drops, which could be used in conjunction with blockbuster wet AMD drugs like Lucentis or Eylea that continue to grow sales year-over-year. While Regeneron Pharmaceuticals (NASDAQ: REGN) showed that it was possible for a small pharmaceutical company to successfully market into the wet AMD indication (and associated indications, even off-label), a big pharma acquisition of Ohr’s pipeline is also possible. The probability of this usually increases as the company makes more progress in clinical trials, although it wouldn’t be surprising if Ohr received an offer after strong Phase II data.

Another warning on risk:

Biotech investors should know that most stocks in this sector are highly risky. Catalysts are also very risky, because they are by nature giant spikes in volatility that can permanently move a stock either up or down.



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