September 27, 2007

NeurogesX and Vanda submit marketing applications

Development-stage biotechnology companies NeurogesX (NGSX) and Vanda Pharmaceuticals (VNDA) both announced today that they have filed marketing applications for their respective products. NeurogesX, which announced positive top-line data for its pain patch NGX-4010 earlier this month, said that it has filed a Marketing Authorization Application with the European Medicines Agency for NGX-4010. Vanda said that it has filed a new drug application with the FDA for its schizophrenia drug iloperidone.

Both announcements were expected, but are still significant for investors.

First, NeurogesX's announcement means that it remains on track with its plan. The company expects to file for approval of NGX-4010 in the United States in the first half of next year and approval in Europe before that would be very positive for the company. Starting in Europe will force the company to get a partner sooner, which investors want. It also allows the company to start earning revenues while the NDA is under review in the US, which would increase the company's value.

As for Vanda, longs want to see iloperidone get approved ASAP. This stock has been a huge short for the last couple of months and investors need the belief that the stock is going to go up. It is very discouraging that Vanda still does not have a partner, either. The company has been searching for one for a while now, and the fact that Vanda filed the NDA without a partner is cause for some concern for some investors. The impression is that big pharma is not necessarily believing the hype of iloperidone. That would not bode well for Vanda; a partner is necessary for this company because the schizophrenia market is huge and there is significant competition. A big pharma partner would give iloperidone much more validation in the marketplace.

I have written several articles on both of these stocks, and I still think they are buys. However, the issue of a partner for both will become more and more significant as time passes. Vanda's stock will not make a move to the upside until there is reason for shorts to cover. I really believe a partner will give them reason to do so. NeurogesX sits in a much better position because it has a product that a lot of analysts feel can make an impact in a market where there is less competition, but a partner announcement would be the next catalyst to make the stock move higher.

Disclosure: I own shares in both VNDA and NGSX


Anonymous said...

Do you happen to know the expected timeframe for a decision on the Euro marketing app?


Sizz said...

From what I've found, it could be anywhere from 6-15 months. Hopefully, the company will give an expected time frame at some point.
Studies have found that FDA and EMEA approval times over the past 5 years are around 15 months. But, NGX-4010 has fast-track status in the US, and those drugs take around 6 months for approval and hopefully the same could be said for in Europe.


Some excellent research.