Hana Biosciences provided a business update about the progress made during the third quarter.
link to Nov. 12th CC: ir.hanabiosciences.com/eventdetail.cfm Complete original NDA will be submitted in first half of 2011. This change in process is not expected to effect the timing of submission completion, review or potential approval. "During the third quarter of 2010, our focus was on preparation of the 5 modules that make up the NDA submission for Marqibo(R)" stated Steven R. Deitcher, M.D., President and Chief Executive Officer of Hana Biosciences. "An analysis of data from the Menadione Topical Lotion Phase 1 program showed that it was generally safe and well tolerated. In addition, the dose limiting toxicity and apparent maximum tolerated lotion strength were identified. Our strategy is to seek a partner to enhance and accelerate the continued development of Menadione Topical Lotion.
While this should have been considered as good news, some impatient investors have taken their profit off the table after the recent rise of the share price, +50% in one month (While HNAB was down 28% after the CC, it is good to note that the volume was very low). We think the potential is still here and this might represent a good buy opportunity since the submission of the NDA is just few months away and it will be submitted as a complete original NDA with all the modules.
During the CC Dr. Deitcher was very confident that the NDA will be submitted in the first half of 2011. He stated "We are well on the way to accomplishing that goal..." Hana Biosciences was working on preparing the 5 modules during the third quarter and this will carry on through the end of the year, almost all of the modules will be completed before the end of 2010, we believe a change for a full submission rather than module by module might be a good strategy and Dr. Deitcher mentioned during the CC that it was suggested and recommended by the FDA, it is most convenient for them.
As of September 30, 2010, the Company had cash, cash equivalents and available-for-sale securities of $27.7 million. With the recent $40M financing round, that brings the market cap of Hana Biosciences to around $50M, which we consider to be still very low regarding the pipeline, and the long term potential for Marqibo in other indications.
The Clever Bull has conducted an exclusive interview with Hana Biosciences to highlight more specific points such as the NDA application, the potential for Marqibo in other indications, Menadione, Warburg financing deal. Here is the interview:
1- You are about to fill the rolling NDA for Marqibo, are you confident to get an accelerated approval review? You said the NDA will be filled before end of 2010, are you still on track with this time frame?
Response: On November 8, 2010 we held a pre-NDA follow-up meeting with the FDA. At that meeting we and the FDA agreed that Hana would submit all of the NDA modules simultaneously instead of following a rolling submission process. This change in process is not expected to effect the timing of submission completion, review or potential approval. We anticipate submitting the completed NDA in the first half of 2011. We are pursuing an accelerated approval of Marqibo and the program already has Fast-Track and Orphan Drug designations from the FDA.
2- Can you confirm that other applications with Marqibo such as Front-line NHL and Front-line Ph-ALL which represent a total market of around 5B will both only require Phase III studies? Are they already started or when do you plan to start them?
Response: We expect that studies such as the ones you indicated will only require Phase III studies. However, until a Phase III trial protocol is approved by the FDA there is not 100% certainty. No Phase III clinical trials of Marqibo have commenced. The logical strategy is to receive the FDA’s approval decision on Marqibo’s current indication before committing funds to a large, expensive, label expansion trial.
3- Are those other applications with Marqibo already founded or do you plan to partner with the classic method of upfront payment and royalties system?
Response: For large, expensive, multi-national, Phase III clinical trials, it is common for small companies to seek to share costs with another entity. We are keeping all our options open.
4- Marqibo has been granted EMA Orphan Drug designation in Europe and you said you are exploring the potential for an authorization under exceptional circumstances. Can you tell us more about this process and does it mean Marqibo may be approved in Europe in 1H11?
Response: Hana will seek formal Scientific Advice from EMA in 2011. Approval in Europe will require a full regulatory submission. The approval decision in Europe is anticipated to follow the approval decision in the US.
5- There is actually one clinical trial that is ongoing with the NCI with respect to pediatric cancers ALL, when will we have some data about this promising indication?
Response: The pediatric oncology branch of the NCI will be conducting a Phase 1 pharmacokinetic and dose finding study. The study could take up to 2 years to fully enroll.
6- Now, with respect to Menadione, we are waiting for Top-line data and the start of the Phase II before end of this year. The focus is on Marqibo for now and investors have yet to discover the potential of this topical cream. Since it has the potential to prevent the rash in chemotherapy treated patients and it is also effective to treat psoriasis, can you tell enlighten us about the market potential in term of numbers?
Response: First, we have no clinical data demonstrating the efficacy of Menadione Topical Lotion for treating psoriasis. We recently completed the Phase 1 program. The Phase 1 program has successfully demonstrated that MTL is generally safe and well-tolerated. The dose limiting toxicity, skin irritation and redness, was only observed at the 0.2% lotion strength. The apparent maximum tolerated lotion strength is 0.1%. MTL applied twice daily at all strengths, including the highest lotion strength tested (0.2%) resulted in no appreciable systemic exposure.
Due to the fact that there are no comparable lotions indicated for the treatment of EGFR rash, there is no empirical data establishing the size of the opportunity. It is estimated that there are approximately 45,000 to 50,000 people undergoing EGFR therapy annually in the U.S and Europe.
7- Since Menadione is a topical cream, does it need to go through a classic FDA review process with a NDA filling? You said you plan to find a partner for Menadione, you mentioned discussions with partners are ongoing, can you tell us more about this?
Response: Menadione Topical Lotion requires the completion of the standard FDA clinical trial process. We are unable to comment on discussions with potential partners.
8- You recently signed a financing deal with Warburg Pincus for up to $100M. While many investors fear dilution to come, can you explain the Warburg’s strategy with your company? Do you feel it’s a long term partner that will push Hana Bioscience to a bigger company?
Response: Warburg Pincus has a track record as a long-term investor seeking to generate significant value but we are unable to predict how things will progress with Hana at this time.
9- There has been some misunderstanding with the convert prices post R/S. Can you confirm that convert prices did increase 4X also with the R/S and are now at $0.72 and $1.10? We have seen that Warburg is a long term partner with companies they invest on, do you think they will convert and sell their shares on the market or rather they will wait to get the full potential in the coming years before selling any?
Response: The new conversion prices are $0.736 for the Series A-1 Preferred Stock and $1.104 for the Series A-2 Preferred Stock. Based on the Investment Agreement, the preferred shareholders have options for how they may choose to create liquidity for their preferred shares, including converting to common shares or, if there is an acquisition, preferred shareholders may opt to receive proceeds in cash without converting into common shares. We are unable to predict if or when preferred shareholders may choose to convert their preferred shares to common shares.
10- We know that Warburg has a large portfolio of biotech companies that are almost all traded on the NASDAQ with a market cap of over $500M, do you think we might see HNAB back to the NASDAQ in early 2011?
Response: There are certain requirements to be listed on exchanges such as Nasdaq and Amex. Among the requirements are share price, stock holder equity, and market cap, as well as others. We are unable to predict when Hana may meet the necessary requirements, if at all.
Forward-Looking Statement
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipates," "expects," "plans," "believes," "intends," and similar words or phrases. These forward-looking statements include without limitation, statements regarding, the timing, progress and anticipated results of Hana's planned NDA filing relating to Marqibo, including whether such NDA submission will be accepted for review or approved by the FDA; statements regarding the timing and progress of proposed clinical trials; statements regarding the potential of Marqibo to replace existing therapies and the expected benefits Marqibo may have for patients with relapsed ALL compared to existing therapies; statements regarding our ability to secure a development partner for Menadione Topical Lotion; and statements regarding the Menadione Topical Lotion regulatory approval process. Such statements involve risks and uncertainties that could cause Hana's actual results to differ materially from the anticipated results and expectations expressed in these forward-looking statements. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially from these statements. Among other things, there can be no assurances that any of Hana's clinical and regulatory development efforts relating to Marqibo will be successful; that even if an NDA for Marqibo is accepted by the FDA, that it will be approved; that the data of the clinical trials of Marqibo will be sufficient to support approval by the FDA of an NDA for Marqibo; that Hana will have completed all other activities necessary for the filing of an NDA or other submission with the FDA; that the results of the clinical trials of Marqibo will support Hana's claims or beliefs concerning Marqibo's safety and effectiveness; and that Hana will be able to secure a development partner for Menadione Topical Lotion. Additional risks that may affect such forward-looking statements include Hana's need to raise additional capital to fund its product development programs, including Marqibo, to completion, Hana's reliance on third-party researchers to develop its product candidates, and its lack of experience in developing and commercializing pharmaceutical products. Additional risks are described in the company's Annual Report on Form 10-K for the year ended December 31, 2009 and in the Company's Form 10-Q for the period ended March 31, 2010. Hana assumes no obligation to update these statements, except as required by law.
Full Disclosure: -Long position on HNAB
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