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OPNT: Uplists to NASDAQ

08/29/2017
By David Bautz, PhD

NASDAQ:OPNT

Opiant Uplists to the Nasdaq Stock Exchange

On August 28, 2017, Opiant Pharmaceuticals Inc. (NASDAQ:OPNT) announced its shares of common stock were approved for listing on the Nasdaq Capital Market, effective August 29, 2017. This is an important corporate milestone, and is something that the company had previously indicated was a goal for the second half of 2017. We believe the uplisting will help to provide better liquidity, increase visibility with investors, and ultimately expand the company’s shareholder base.

Opiant CEO On TV

In support of the company’s efforts to expand its visibility, Opiant CEO Dr. Roger Crystal has made multiple television appearances over the past month, including:

➢ On July 26, 2017, Dr. Crystal appeared on the Fox Business Network. He was interviewed by Maria Bartiromo about the ongoing opioid epidemic in the U.S. and the advantages of NARCAN® Nasal Spray in treating victims of opioid overdose. 

➢ On July 27, 2017, Dr. Crystal appeared on Fox & Friends during a recurring segment, titled “Addiction in America”, that discusses various aspects of the addiction crisis in the U.S. The focus of the interview was the ongoing opioid epidemic and the advantages of NARCAN® Nasal Spay in treating opioid overdose. In addition, Dr. Crystal discussed the company’s pipeline of addiction treatment candidates. 

➢ On August 14, 2017, Dr. Crystal appeared on “The Story with Martha MacCallum” on the Fox News Channel to discuss President Trump’s declaration of a national emergency in regards to the ongoing opioid epidemic in the U.S. In addition, Dr. Crystal commented on the wider access to NARCAN® Nasal Spray brought about by the national emergency declaration and the ability to get additional funding for the company’s pipeline to continue developing additional addiction treatments. 

Opiant Receives Additional $3.75 Million Payment From SWK

On August 10, 2017, Opiant Pharmaceuticals Inc. (OPNT) announced an additional $3.75 million payment from SWK Holdings Corporation related to the royalty monetization agreement related to the sale of NARCAN® Nasal Spray signed between Opiant and SWK in December 2016. According to the agreement, the $3.75 million payment was due to Opiant upon Adapt Pharma recording >$25 million in cumulative net sales of NARCAN® Nasal Spray for any two consecutive quarters from Oct. 1, 2016 to Sep. 30, 2017. This occurred over the first two quarters of 2017. 

The royalty monetization agreement with SWK stipulates that SWK will receive all royalties on the sale of NARCAN® Nasal Spray up to $26.25 million dollars. Following that, the royalty rights will revert back to Opiant and SWK will receive a residual royalty of 10% on all royalties from the sale of NARCAN® Nasal Spray. 

Conclusion

The $3.75 million payment from SWK occurred sooner than we had modeled for, and we believe this is evidence of NARCAN® Nasal Spray selling well above our estimates. Adapt Pharma is a private company, thus we are unable to ascertain exact revenues of NARCAN® Nasal Spray. Before monetizing the royalties, Opiant received $105,097, $234,498, and $524,142 in royalties for NARCAN® Nasal Spray for the first, second, and third quarters of 2016, respectively. Those royalty numbers point to a rapid rise in sales of NARCAN® Nasal Spray (we model for a composite 11% royalty), and with at least $25 million in sales for the first two quarters of 2017, we believe that SWK may receive $26.25 million in royalties and milestone payments sooner than we had originally thought. We now model for royalties to revert back to Opiant in 2020, with peak sales of NARCAN® Nasal Spray of $250 million. 

Opiant’s stock has had an amazing run in the past month, rising from $11.50 on July 31, 2017 to the current price near $25. We believe this is due in part to management getting the word out about the company and investors beginning to recognize the value of NARCAN® Nasal Spray and its advantages over other forms of naloxone in treating opioid overdose. The company is continuing to execute on its business plan, with an uplist to the Nasdaq as the latest positive move. Thanks to the additional $3.75 million payment from SWK earlier in the month, the company is well financed to continue to advance its pipeline, and our current valuation is $30 per share. 

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