Closer Look: BioLineRx's Multi Billion Dollar Schizophrenia Drug
LOS ANGELES, CA -- (Marketwire) -- 01/15/13 -- BioLineRx engages in
identifying, in-licensing, and developing therapeutic candidates. Its
lead clinical therapeutic candidate under development is BL-1020,
which is in Phase II/III clinical trials to improve cognitive
function in schizophrenia patients. BL-1020 is an orally available,
first in class GABA enhanced antipsychotic that combines dopamine
antagonism with GABAergic activity.
BL-1020 is being tested against Johnson and Johnson's schizophrenia
drug Risperdal, which generated worldwide sales of $24.2 billion from
2003 to 2010, reaching $4.5 billion in 2007.
According to Wikipedia: "Risperdal is the trade name for risperidone,
an antipsychotic drug which is mainly used to treat schizophrenia but
also used for other conditions. Due to its strong serotonin,
dopaminergic, and adrenergic antagonism, risperidone was approved by
the FDA in 1993 for the treatment of schizophrenia. In 2007,
risperidone was approved as the only drug agent available for the
treatment of this disease in youths, ages 13-17. It was also approved
that same day in the treatment of bipolar disorder for people ages
10-17. In 2006, the FDA approved risperidone for the treatment of
irritability in children and adolescents with autism. This decision
was based in part on a study of autistic people with severe problems
containing violent meltdowns, aggression, and self-injury."
With all of the above indications, it is evident risperidone is an
important and versatile drug.
Recently, a pair of companies announced they were on track in the
early development with another candidate using risperidone. Earlier
this month, Durect Corporation announced its licensee, Zogenix
reported positive single-dose pharmacokinetic results from the Phase
I clinical trial of Relday, a once-monthly subcutaneous formulation
of risperidone for the treatment of schizophrenia.
Zogenix needed this bit of good news as its pain killer drug Zohydro
was shot down by an FDA Advisory Committee by a vote of 11-2 against
recommending the drug to the FDA for approval, causing its stock
price to plummet 42% on December 10th, 2012.
BioLine uses risperidone as the positive control for antipsychotic
efficacy in its
phase II/III CLARITY trial. The study is designed as
a randomized, double-blind clinical trial to examine acute (6 weeks)
and long-term (6 months) antipsychotic and cognitive efficacy,
safety, and tolerability of BL-1020. The cognition primary endpoint
measure will utilize the MATRICS Cognitive Consensus Battery (MCCB),
and cognitive benefit will be assessed by comparing the change from
baseline in total MCCB score. These scores will compare BL-1020 to
risperidone at the landmarks of six, 12 and 24 weeks.
Significant upcoming Catalyst:
BioLineRx has stated that they will present the Phase II/III CLARITY
trial results during the week of March 18, 2013.
So what is the big deal with another schizophrenia drug? As mentioned
above, JNJ's Risperdal has raked in billions of dollars in revenue
before going off of patent protection in 2010. BL-1020 has patent
protection through 2033. The preliminary results for BL-1020 indicate
it's as effective, if not more effective and safer than Risperdal. If
the data that is expected to be released in March confirms the
previous results, we can expect a massive move in the stock price.
Acadia, recently reported positive Phase III data for its drug
Pimavanserin, which is in development as a potential treatment for
Parkinson's disease psychosis (PDP). Pimavanserin is specific to PDP
and has the potential to be a multi-billion dollar drug if approved
as evident by Acadia's stock price surging over 200% intraday on
11/27/12, hitting a high of $6.50 (over $7 in the pre-market trading
Pimavanserin's first Phase III study failed to meet its primary
endpoint, but after re-tailoring the trial, Acadia has now seen
success with the drug. While PDP is different from schizophrenia,
both are defined as a form of psychosis. The market potential for
both combined is massive, demonstrated in part by Risperdal's 7 year
revenue of over $24B.
It's also worth noting that Acadia ended development of its own
schizophrenia drug AM-831 in July of 2012. Acadia and its partner
Meiji Seika Pharma Co. stated that the drug did not meet certain
criteria for advanced testing -- Drug companies know treatment for
schizophrenia is a very lucrative market.
Below, let's take a look at a balance sheet summary for BioLine.
Total Cash (mrq): $ 26.38M
Total Cash Per Share (mrq): $ 1.75
Total Debt (mrq): $ 44.85K
Total Debt/Equity (mrq): 0.24
Current Ratio (mrq): 3.91
Book Value Per Share (mrq): 1.25
Shares Outstanding5: 15.06M
Market Cap (intraday): $43.08M
"I have highlighted the numbers that stick out to me above in bold.
Bioline having a $43M market cap has to be the result of the company
flying under the radar of speculative investors and traders. If
positive results are announced in March, I have to think the stock
will at least gap up over 100% because BL-120 could be worth billions
if ultimately approved for sale," said Scott Matusow.
Bioline having $1.75 cash per share is good, along with $26.3M in
cash and a current burn rate of about $4.5M a quarter. This gives the
company over a year of breathing room to operate before they might
have to engage in a possible cash raise.
BL-120 is not the only drug the company has in its pipeline:
Drugs in Clinical trials:
BL-1020 Schizophrenia (Currently in Phase II/III trial)
BL-1040 AMI (Currently in CE Mark Registration Trial)
BL-5010 Skin lesions (Phase I/II complete)
BL-7040 Inflammatory Bowel Disease ( Phase II)
BL-8040 Acute myeloid leukemia & other hematological cancers (Phase II
BL-1021 Neuropathic Pain (Currently in Phase I trial)
Drugs in Pre-clinical:
BL-6030/1 Bacterial Infection (BIJ)
BL-7010 Celiac Disease
BL-5040 Cachexia (BIJ)
BL-7020 Psoriasis (BIJ)
"I find the potential of Bioline to be very enticing since the company
has only a $43M market cap and over $26M in the bank. As mentioned
above, I feel Bioline has been flying under the radar and offers a
good opportunity at its current price. Also of note,
2 analyst firms
have slapped a buy rating on the stock with one assigning a target
price of $11.
"Sarepta was flying under the radar until it recently grabbed
investor attention with positive data releases for Eteplirsen, which
is in Phase II clinical stage for the treatment of Duchenne muscular
dystrophy (DMD). In July 2012, following a 1:6 reverse split, Sarepta
was trading around $3.30 a share. Currently the stock trades for over
$27 as investors and traders have taken notice of the huge developing
story at Sarepta. While it's not likely that Bioline will see a stock
price anywhere near the $27 range anytime soon, I do feel it's a good
bet its stock price can see a very large percentage gain if the
CLARITY trial results are positive in March, and nice price
appreciation beforehand in anticipation of the results.
"The stock has formed a longer term rounding bottom and is showing
signs of reversal after breaking out of its down channel. The MACD
and RSI are very bullish. First target appears to be the 38.2%
retrace at $4.00.
"Overall, I like Bioline for at least a nice catalyst trade, and
expect the stock to be trading much higher over the next month. If
the Phase II data release is positive, which it should be, I would
expect a stock price over $5," said Scott Matusow.
Disclosure: Author Scott Matusow @scottmatusow is long BLRX.
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