AndrewGreenBull's Blog : FDA Calendar Focus: XNPT

It was three months ago when I last mentioned about XNPT. Three months passed like a blink of an eye, and now XNPT is back in the market spotlight.

Although FDA put off the review time for the company’s potential restless legs syndrome drug XP13512, XNPT didn’t plunge like others in the same situation. There was a small pullback when the news first released, but after that XNPT gradually regained the lost ground.

We can tell that the market is very patient and confident on XNPT, and there are several things what might explain this:

First of all, XNPT is around 88% owned by institutional investors. Generally, institutional investors have deeper view of a company and have more patience to hold their position until success.

Secondly, XP13512 is a very promising treatment for restless legs syndrome (RLS). According to XNPT’s Phase 3 clinical trial data, all doses of XP13512 demonstrated statistically significant improvements over placebo on the primary endpoint, and XP13512 was also generally well tolerated at all doses in this study.

At last, FDA didn’t require additional trial but Risk Evaluation and Mitigation Strategy (REMS). This situation was similar to DYAX. Just like what I predicted for the approval of DYAX, I believe that XNPT has a very high possibility for FDA approval. Taking these three things into consideration, the market has good reasons to show its confidence as well as patience on XNPT.

Further more, good news came out on last Thursday that FDA don’t even need advisory panel for the review of XP13512. XNPT had a nice rally over the news and broke the $20 resistance. The FDA review date for XP13512 is scheduled on Feb 2.

XNPT’s pipeline: http://imgur.com/StNB9.gif

XP13512 Overview: XP13512 is a drug candidate for restless legs syndrome (RLS). RLS is a neurological condition, which affects 15.5 million medically significant sufferers across the seven major markets. The cause of RLS is unknown, but some associated risk factors include uremia, iron deficiency, diabetes and spinal cord or peripheral nerve injury.

XP13512 Potential Market: The total sales of RLS market had climbed from $165 million in 2005 to nearly $330 million in 2006, and this number jumped to near $500 million in 2007, according to IMS health, an industry information agency. If this market keeps growing with this rate, the total sales will break 1 billion dollars in 5 years. This is somewhat contributed to GSK’s multi-million dollars advertisement.

Agreement with GSK: In February 2007, XNPT entered into an exclusive collaboration with GSK to develop and commercialize XP13512 in all countries of the world excluding five Asian countries. Under the terms of the agreement, XNPT can receive up to $275,000,000 upon the achievement of additional clinical and regulatory milestones, of which $85,000,000 has been received to date, including a milestone payment of $20,000,000 received in March 2009, and up to $290,000,000 upon the achievement of specified XP13512 sales levels.( 10Q P9)

Agreement with Astellas Pharma: XNPT licensed XP13512 to Astellas Pharma in Japan and 4 other Asian countries. Astellas Pharma has already submitted NDA in Japan in last November. XNPT has received 18 million dollars milestone payment to date and is eligible to receive additional potential clinical and regulatory milestone payments up to 42 million dollars besides sales royalties, according to XNPT’s third quarter earning report.

XNPT Financial:There were about 160 million cash and equivalence, short-term investments and other current assets on XNPT’s third quarter balance sheet. This strong financial position could make most of other small cap companies jealous. If you take a look of the quarterly report in the same period, you will find out that XNPT had more liquidity on the balance sheet.

XNPT is currently trading ahead of its 50 days & 200 days moving average. With the approach of the FDA decision day, XNPT, which is under market spotlight, will have a very good chance to break the previous high $25 and even 52 weeks high $30 if XP13512 got FDA approval as expected.

*Disclaimer: The author of this post is not a licensed analyst and the purpose of this post is for information sharing and discussion only, not recommendation for any stock buying and selling activity. Please do your own research before making any trading decision.