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Research Report Update

POZN - Pozen's PA32540 Meets Goal

03/22/2012


By Jason Napodano, CFA

This morning, Pozen (NasdaqGM:POZN) announced positive results from the company's two pivotal phase 3 clinical trials studying PA32540, a novel, coordinated-delivery tablet of immediate-release omeprazole (40mg) and delayed release aspirin (325mg). In total, both phase 3 trials enrolled a total of 1,049 subjects at risk for developing aspirin-associated ulcers.

Patients in the study were already taking 325mg of aspirin daily for at least three months for secondary prevention of cardiovascular events. The study randomized patients into either PA32540 or 325mg enteric-coated aspirin once daily. Patients were followed for a total of six months.

Management did not release any of the data from the trials, only noting that the results of the primary endpoint, a significant reduction in the cumulative incidence of gastric ulcers following administration of PA32540 vs. 325 mg enteric-coated aspirin over six months was met. Secondary endpoints, including a reduction in gastroduodenal ulceration as well as a reduction in discontinuation due to upper gastrointestinal adverse events in subjects taking PA32540 compared to 325mg enteric-coated aspirin, were also met.

We expect Pozen to present full data from these pivotal phase 3 trials, as well as full data from the previously completed 12-month open-label safety study, at an appropriate upcoming scientific meeting, as well as publish the full results in a peer-review journal later in 2012 or in 2013.

...Partnership & NDA Filing Up Next...

With the phase 3 data now in hand, the next two major catalysts for Pozen's stock are a partnership for commercialization and the NDA filing. Management has guided to the third quarter 2012 for the NDA filing. Although, we note data from the two above phase 3 trials was guided to the second quarter 2012, and management beat that by 8 days.

As far as a partnership, we remind investors that in October 2011, Pozen announced it had retained Keelin Reeds to assist in executing a strategic partnership on PA. At this point, it remains to be seen if Pozen will sign one global partner on PA32540, or look to do region-specific deals for commercialization. Therefore, over the next several months, we could be looking at multiple deals announced by Pozen on PA.

Pozen seeks a partner or partners that embrace the company’s philosophy of affordable pricing and has demonstrated success in selling in the cardiovascular field. Pozen plans to remain active in the commercialization efforts for PA32540 by providing strategy and guidance from its digital advisory board.

We sat down with management at Pozen (CEO John Plachetka & CFO Bill Hodges) in January 2012. Mr. Plachetka reiterated his goal on signing a commercialization partnership for PA32540 this year. We think investors can use the Vimovo transaction with AstraZeneca that provided $40 million upfront, $45 million in approval milestones, and potentially $290 million in sales milestones plus roughly 10% royalties on sales as a good road map for what to expect with a deal on PA.

Resources For Additional Information

For additional information on Pozen, we highlight some of our previous notes:

Market Opportunity For Pozen's PA Under-Appreciated - January 31, 2012 (via Bio Analyst)

Pozen Deal Unlocks Value - November 28, 2011 (via Seeking-Alpha)