Recently, the investment community has really been warming up to Avanir Pharmaceuticals (NASDAQ:AVNR). A recent upgrade from Jeffries to "BUY" has helped fuel the recent price action.

A look at indications and potential market for Zenvia reveals the following:

Pseudobulbar affect (PBA) is a neurologic condition characterized by involuntary, sudden, and frequent episodes of laughing and/or crying in patients with underlying neurologic disease or injury for which there is no FDA approved therapies. It is estimated to affect approximately 2 million patients in the U.S. with moderate to severe PBA. PBA is estimated to occur in 49% of patients with ALS, in 10% of patients with MS, in 11% of patients 1 year after suffering a stroke, and in 11% of patients after a traumatic brain injury. There are currently no FDA approved treatments for PBA; Zenvia is serving an unmet medical condition.

It is important to note that AVNR will be seeking a fairly broad label use for Zenvia. Per CEO Keith Kaitlin," as has been the agreement all along with the FDA, if we study Zenvia in two separate neurologic populations, like we did in the STAR trial, then that should be sufficient for a broad label for all patients that have PBA." Zenvia would also be prescribed indefinitely, which adds considerable value to future revenue.

Zenvia has patent protection for 15 years(until late 2025) which will be essential to AVNR's future. More importantly, they are going to be marketing and selling Zenvia themselves. This translates into considerably more potential future revenue and higher price estimates. The management seems pretty confident that they will get Zenvia through the FDA. So confident, that they're currently looking to hire 60+ new employees in Sales & Marketing. By essentially tripling their current work force, they will have adequate sales staffing levels for the launch of Zenvia. The sales team is being lead by Michael McFadden, who has a stellar track record with over 20 years of pharmaceutical commercialization experience, most recently at Amylin Pharmaceuticals. During his tenure, Amylin’s Managed Markets team was consistently recognized as one of the leading managed markets teams in the industry.

AVNR has a strong balance sheet and recently raised $26 million back in May, which should quell fears of dilution. They should have roughly $40 million in cash, with little long-term debt. With considerable insider and institutional holdings, the Street has taken notice and will ride this out for the profit. Management has successfully obtained regulatory approval in the past(Abreva) and the future seems even brighter with Zenvia.

Disclosure: Long AVNR

Patrick Crutcher is the managing editor of the biotech stock blog chasingthealpha.com

"Featured Content" profiles are meant to provide awareness of these companies to investors in the small-cap and growth equity community and should not in any way come across as a recommendation to buy, sell or hold these securities. BiomedReports is not paid or compensated by newswires to disseminate or report news and developments about publicly traded companies, but may from time to time receive compensation for advertising, data, analytics and investor relation services from various entities and firms. Full disclosures should be read in the 'About Us Section'.

---

Add this page to your favorite Social Bookmarking websites