When it comes to investing in pharmaceutical companies, an investor needs to be aware of the company’s pipeline. How close a product is to final approval, and what is coming along behind it, are the leading indicators of the company’s potential. Problems can crop up at any time to sidetrack a new drug in the approvals process, but as these drugs get closer to the end of Phase III FDA approvals, many companies start to circle for their piece of the pie.
Transdel Pharmaceuticals Inc., a specialty developer of topical pharmaceuticals, works to discover and commercialize products oriented toward topical delivery systems and pain relief. The company is currently entering Phase III trials for its flagship product and working toward outselling its patented topical delivery system.
The company has recently received FDA approval to enter phase III trials for its Ketotransdel topical cream for soft tissue injuries. It is a non-steroidal, anti-inflammatory product targeted at a potential pain relief market of approximately $6 billion based on cox-2 inhibitor market estimates (cox-2 inhibitors are currently a leading form of pain relief that may or may not be prone to side effects, according to some reports.)
Apparently, some private investors see current trials and results to be fairly positive in nature. A $4 million private placement with warrants has recently been arranged by the company at $2.20 per share – a fairly nice premium above current valuation. As the product moves through Phase III, it will be interesting to see whether past trial results bear out the faith of investors. By all accounts, however, the future does appear bright, as no adverse side effects have been found to date.
As much as the company is resting its future on this product, it may be the company’s patented topical delivery system that adds significantly to its revenue stream over time. The delivery of medication in a topical form is a relatively new delivery system, past the more common products that use it. If the platform is effective for this product, and can be made to work for a variety of medications, it stands to do well for the life of the patent. Only time will tell in this regard, but the potential is very large for expanded revenue. How the company markets this aspect of its product base, in addition to its Ketotransdel product, will be the key.
It is currently shopping for a marketing partner amongst the leading drug companies and looking for a big score. In any event, the company does appear to have a drug just on the doorstep of marketing, which is where any investor wants to find a pharmaceutical company.
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