Agile Therapeutics Jumps 35% on a Patent Extension Print
By Brian Wilson - Lead Contributor   
Tuesday, 24 June 2014 08:59

Reminding us that low volume and low float stocks can move dramatically with a single press release, women’s health company Agile Therapeutics (AGRX) moved 35% higher yesterday after it was announced that the company received an extension on a patent for a transdermal contraceptive known as Twirla.

Under the new patent, Twirla should protected until 2028.

Twirla (aka AG200-15) is a reformulated version of ethinyl estradiol and levonorgestrel that is designed to compete with oral contraceptive products with increased efficacy and higher compliance rates. It is currently being put through a large Phase 3 trial with over 2100 patients that is expected to conclude in January 2016.

To demonstrate contraceptive efficacy, the trial data will be measured with the Pearl Index. This is an old (but simple) index designed to measure rates of unwanted pregnancy in a population, and is the gold standard for efficacy of contraception products. The lower this index is, the better.

Because this ongoing Phase 3 for Twirla will produce a single number (Pearl Index) for its lone AG200-15 arm, the results of this trial will be simpler much and easier to interpret than the pharmacokinetic data that was collected for Twirla during Phase 1/2 trials. It will also be double the size of the previous Phase 3 trial, which only had 1,122 patients on Twirla, and was designed with a control arm.

Popular oral contraceptives, like Alesse and Yaz, had a Pearl Index of .84 and .49 in two clinical trials that we reviewed. Although we believe that contraceptive patches could boost patient compliance, we do want to see a better Pearl Index from this trial before we get excited over the commercial prospects of Twirla. In the previous Phase 3, Twirla had a Pearl Index of 3.1 after correcting for noncompliant patients.

AGRX has doing extremely well since its IPO on May 23rd 2014, when it started at a price of $6.00 per share. Although people may be tempted to base the valuation of this company on peak sales estimates, I think it’s far too early to take estimated figures too seriously. It is easier to compare the valuation of Agile  with other women’s health companies like TherapeuticsMD. With an EV of ~$150 M, it is certainly not a stock you’d want to short.

We would also give a nod to Agile due to its ability to attract attention from high quality broker-dealers (RBC Capital Mkts. And William Blair.) Due diligence and affirmation means a lot more from these firms compared to that of a few other broker-dealers who are only looking to collect investment banking fees.

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