Aradigm Corporation

Aradigm Corp. (ARDM, $0.27) http://www.google.ca/finance?q=OTC:ARDM Aradigm is a pharmaceutical company with technologies, and drugs used in the treatment of chronic respiratory diseases. Before I go further into explaining the technologies and drugs Aradigm offers, you should learn about the FDA approval process. This is important because before any particular drug can be used on the general public, it must be “FDA approved”. There are essentially 6 steps in order to achieve FDA approval, and the total process can take anywhere from 4-8 years (rough estimate) Pre-clinical studies: Composed of in-vitro (test tube), and in-vivo (animal testing) to obtain a basis of drug efficacy, toxicity, and pharmacokinetic information (drug-kinetikos – how long the drug lasts in the body). Results will help the testing organization decide whether the drug is worth pursuing. Phase 0: First human trials (10-15 people), with lose dose to determine pharmacokinetic, and pharmacodynamic (how it works in the body) information. Gives no data on safety/efficacy because dosage too low. Also provides red light – green light information for the company. Phase 1: More human testing (20-50 people), to further determine pharmacodynamic’s, pharmacokinetics, and pharmacovigilance (understanding and prevention of adverse effects from the drug). Normally tested on healthy patients. There are various types of phase one trials which can be read about in the link below. Phase 2: If safety confirmed in phase 1 trials, phase 2 trials (20-300 people) will be performed to – asses dosing requirements, and monitor efficacy of the drug. If the drug is to fail, this usually occurs in the phase 2 trials. Phase 3: (300 – 3,000 people), final conclusion on how effective the drug is. Most expensive, time consuming. If this all works out…. Application: Apply to the FDA with the drug – Prepare elaborate regulatory application. Approval: If application met by FDA standards, FDA will set a potential approval date. If you are the drug company or an investor in the company. Well, hope for the best. The pipeline, filled with endless opportunity - Two of their drugs stand out in my mind: Liposomal Ciprofloxacin (ARD-3100, phase 2): This drug is inhaled to combat the ever so irritating Cystic Fibrosis disease. Cystic Fibrosis is a genetic disease of the lung that typically causes abnormal development of mucus in the lungs, pancreas, and other organs. Development of mucus in the lungs will block the airways leading to chronic coughing, and increased susceptibility to diseases. Liposomal Ciprofloxacin targets bacterial infections, and then destroys them. Liposomal Ciprofloxacin is already offered today in application through oral or intravenous methods. Having Liposomal Ciprofloxacin delivered directly to the lungs provides increased safety and efficacy. Studies done on mice showed that intravenous injections of ciprofloxacin appeared to be rapidly absorbed into the bloodstream however the drug was not detectable four hours after injection. In contrast, Aradigm’s Liposomal Ciprofloxacin formula reached the lungs much faster, and was detectable in the bloodstream 12 hours after inhalation. According to the CF Foundation, CF affects around 30,000 children and adults in the United States, and 70,000 worldwide. Current medical costs per CF patient per year are estimated to be > $40,000. Do the math, that is a lot of money. If Aradigm could attract this customer base to its technology, this could send the share price to the moon. From June 11, 2009 to June 13, 2009, Aradigm presented Phase 1 and Phase 2 data on inhaled Liposomal Ciprofloxacin at the 32nd annual European cystic fibrosis conference. Inhaled Liposomal ciprofloxacin by both healthy and cystic fibrosis patient’s demonstrated similar pharmacokinetics, the resulting half life of the drug was found to be 10.5 hours from a once-daily dosage. Previous data revealed that inhaled Liposomal Ciprofloxacin resulted in a decidedly significant reduction in the formation of Pseudomonas aeruginosa CFU’s (colony forming units) – a measure of the reduction in pulmonary bacterial load of CF patients. Specifically, this data revealed that in a test done on 21 patients, a 300mg once daily dose of Liposomal Ciprofloxacin decreased the P. Aeruginosa CFU by an average of 1.43 log of a two week treatment period. One week after treatment was discontinued; Pseudomonas bacterial density was still reduced by 1.02 log CFU. Nicotine (ARD-1600, phase 1): Nicotine (the principal form of chemical dependence in the country) inhaled for smoking cessation: National Center for Health Statistics reveal that 21% of the United States population age 18 and above are smokers. The population in the United States is approximately 306,770,000 people. According to the World Health organization, 650 million people world wide are smokers. This means that the United States accounts for 9% of the worlds smoking population. Medical costs, for those trying to quit, are $75 billion in the United States alone. Penetrating this market would be an enormous step in Aradigm’s history. Aradigm’s goal with the ARD-1600 drug is to fight cigarette cravings, and through gradual reduction in Nicotine dosages, bury the cigarette as well as nicotine addiction. Preliminary studies have shown that, when inhaled, blood levels of nicotine rose much more rapidly than other approved nicotine delivery systems and Nicotine cravings diminished by 39%. Cravings did not return to their baseline level during the four hour post-treatment monitoring of patients. http://www.aradigm.com/products_1600.html For more information on the FDA approval process visit our friendly neighbourhood wikipedia @ http://en.wikipedia.org/wiki/Clinical_trial#Overview Now Aradigm does have like 4 other drugs in phase 1, and pre-clinical studies as well but it would take too long for me to write about them all. For all you short term investors looking to make some money for University, you don’t have to worry about the approval of any drugs owned by Aradigm. A while back, Aradigm sold another biotech company – Zogenix, its needless injection technology (called Sumavel Dosepro – a sumatripitan injection) for $4 million. This drug is used to combat migraines and the Dosepro is aimed at replacing intravenous, oral, and nasal sprays of Sumatripitan that have already been in use for 15 years. The migraine affects approximately 30 million people in the United States every year. Zogenix filed for FDA approval in late 2008, the FDA has recognized this application, and has set a review date for July 15, 2009. Now, you might ask yourself…. Well what are the chances of FDA approval? Well they are extremely high, remember that sumatripitan already been used to treat migraines for 15 years. Dosepro is a safer, more effective, efficient way to deliver the medicine and combat migraines. The FDA would be screwing 30 million people out of a more comfortable lifestyle if they don’t approve this technology. Now you are probably also wondering, well, since Aradigm sold this technology, how would it profit from the FDA approval. Well this is simple; Aradigm is entitled to royalties upon approval, a milestone payment upon initial commercialization of products in the U.S and elsewhere, including the European Union. Aradigm will also receive royalties upon development and distribution of the Dosepro technology.

Zogenix does have plans on leasing the Dosepro technology to other companies. Dosepro has been created for the quick, effective absorption of drugs and one should take note that Dosepro is not limited to a sumatripitan injection. The potential Dosepro customer base is astounding.

http://biz.yahoo.com/e/090512/ardm.ob10-q.htmlFor more information on Dosepro please visit: http://www.zogenix.com/index.php/products/sumatriptandosepro/ For more information on the FDA approval date, visit http://www.zogenix.com/index.php/news/zogenix-reports-fda-provides-new-pdufa-date-for-sumavel-dosepro/

Update - As we inch closer: 7/7/2009

Low royalties (around 5%) can mean that the July 15th approval will not show huge significant change in the share price. Should be noted that most biotech stocks, despite having nearing FDA approvals are moving in the opposite direction. This is the same for Aradigm, however we are inching closer and closer to the approval date. The market has taken a major dump lately, commodity prices are fkd, biotechs are in a general downtrend, Chinese stocks have been decreasing slowly but surely. What is going on - I have no idea. Let's hope there is another run-up here in the next week. I will be holding Aradigm till the 15th and if I see even 40% profit I will take the opportunity to dump my shares and enhance my Nuvo position. If for some reason the 15th does not bring any profit I am in Aradigm long as I believe their various respiratory treatments will prove to be significantly valuable.

Nuvo Reseach

Nuvo Research. June 24, 2009
(TSE:NRI, $0.34)




Nuvo is a Canadian biotech company based in Mississauga Ontario that focuses on drug delivery to and through the skin. Nuvo’s number one product is Pennsaid, a drug used to combat knee osteoarthritis. Nuvo is, for the third time, seeking FDA approval for this drug in the United States. Pennsaid has already been approved, and is sold in both Canada and in Greece. Why might this approval benefit Nuvo? Well approximately 70 million Americans are affected by osteoarthritis every year. This means that, by expanding in to the United States, Nuvo’s customer base would be WAY higher à more sales à more revenue. Currently, the United States osteoarthritis market is estimated to have annual sales of approximately $4 billion US. . FDA had three issues with Pennsaid on the second approval attempt: Packaging (bottle testing), Safety of Pennsaid with other topical products, and long term dermal safety (because Pennsaid is absorbed through the skin). Since the FDA’s second denial of Pennsaid, Nuvo research has spent over $12 million in research and advancements to ensure that the FDA’s concerns were met and all expectations exceeded. The New Drug Application (NDA) was resubmitted in February 09 and the new PDUFA date is set for August 5, 09. Prior to both previous FDA approval dates, Nuvo has surged to the $.70 to $.80 range. The difference this time is that it will in fact be approved, and shoot up to over a dollar.

Although there are oral forms of osteoarthritis combating drugs Nuvo stands out for the following reason: Drugs taken orally can and will travel through the entire body, making the subject more prone to potential side-effects. Drugs taken transdermally target a specific location on the body (knee in Nuvo’s case), meaning the result is faster, and a lower dosage is needed to gain the same effect as a drug taken orally. The one negative to taking drugs transdermally is that the skin is an excellent barrier to anything that comes in contact with it. Lucky for us, Nuvo spends much of its time and money researching how to better deliver the drug transdermally.

On June 16th, Nuvo entered into a license and development agreement with Mallinckrodt Inc. a subsidiary of Coviden (NYSE: COV) a huge (Just so you get an idea of how huge, Coviden had $10 billion in sales in 2008, with more than 41,000 employees worldwide) U.S distributor of healthcare products. Remember that the PDUFA approval is not until August 5th! This partnership grants Coviden exclusive rights to market and sell Pennsaid (and Pennsaid plus) in the United States. It only gets better, Nuvo received $10 million for entering into this agreement, and when (not if) Pennsaid is approved by the FDA on August 5th, Nuvo is eligible for an additional $15 million milestone payment. This $15 million milestone payment will increase to $20 million if certain product labelling criteria are agreed to by the FDA. Were not done yet, Nuvo will also receive royalties on net U.S sales of Pennsaid and Pennsaid plus. Lastly, Nuvo will be eligible to receive escalating sales milestone payments for the products totalling $100 million. Coviden will also be responsible for all further development and funding costs of Pennsaid. Though being a huge company, Coviden would not just lay down $10 million if it didn’t firmly believe Pennsaid would get approved.

Nuvo is, though being an emerging biotech company, in a stable financial position (which is rare). As of March 31st 2009, Nuvo had $14.2 cash on hand, and a market cap of $62 million. Nuvo’s claimed monthly cash burn is $900,000. With the additional $10 million from June 16, Nuvo has more than enough cash to survive and finance further activities. After FDA approval, Nuvo pretty much won’t really have to worry abou its financial situation. It is extremely rare to see an emerging biotech company with positive cash flow, and this puts Nuvo in an extremely appealing position where the sky is the limit.

Right now is a pristine time to invest. Nuvo has simply just entered its foreplay stage with investors and will blow its load everywhere on August 5th.

At $.34, this is the one short term biotech stock I can confidently recommend you invest in.

http://www.nuvoresearch.com/documents/2009-06-16%20Nuvo%20Licensing%20Agreement.pdf

http://www.nuvoresearch.com/investors/documents/2009-05-29%20Nuvo%20IR%20Presentation.pdf

Post approval pricing estimates - IF YOU SOMEHOW STUMBLE UPON THIS DO NOT COPY THIS STOCKSSLAYER (MICHAEL VLAICU)

The following is a share price assumption made by a knowledgeable investor - AdamJ

The question - What is the potential post approval price assuming that Coviden succesfully commercializes and reaches its traget customer base

The answer - The assumption is this. Coviden would pay a bonus in the 3% to 5% range of anticipated market share. This puts the estimated market between $600 million and a billion. Working on straight royalties of 20% with a multiple of 10 to 15 times earnings would put Nuvo's market cap between $1.2 billion and $3 billion on the top end. Rough guess of total shares including full exercise of all warrants at 400 million puts it between $3 and $7.50. The question is can Coviden penetrate and capture that market share within it's first year. Then you also have to guess at the revenue from production which should include a fair gross profit margin built in. That royalty is gravy over and above standard production values and estimating that revenue and costs are tricky because of the intellectual protection necessary.Pennsaid is selling for $60 on the internet. Let's say Nuvo ships 50 million units at $3 each then that adds another $150 million to the Income statement. My bet is it's more likely around $6 per unit with all the markup going to the value chain. Until there's hard numbers the stock will hit a plateau and should stay there then jump with each milestone.

To Phillip:

What are NSAID’s? NSAID’s are Non-steroidal anti-inflammatory drugs used to lower elevated body temperatures, and relieve pain, and reduce inflammation without any neurological side-effects. NSAID’s are NOT narcotic, and are non-steroidal as this distinguishes NSAID’s from steroids – which can also have anti inflammatory properties.

You all know the most common OTC NSAID’s such as Tylenol and Aspirin. What sets Pennsaid aside from the other NSAID’s is that it applied topically rather than orally to minimize side-effects and to target the problem area quicker and more effectively.

Pennsaid (Diclofenac topical solution) is a drug requiring PHYSICIAN PRESCRIPTION.

60 ml of 1.5% Diclofenac topical solution costs $65 USD on http://www.medisave.ca/

Common side effects include - burning, dryness, redness, itchiness, scaly, thickened, tingling skin.

The following side effects have been reported by at least 1% of people taking this medication:

Heartburn, indigestion, nausea, stomach pains, high blood pressure, nasal congestion, liver problems (demonstrated through yellow skin, dark urine, pale stools, and itchy skin), signs of urinary tract or bladder infection (pain or burning during urination, frequent urination, blood in urine), signs of a sinus infection, redness or swelling of eyes, wheezing, signs of allergic reaction, stomach bleeding, swelling of the hands, feet, ankles.

The following drugs may increase susceptibility to the side-effects mentioned above:

Acetaminophen, ASA, alcohol, corticosteroids, heparin, other NSAIDS, probenecid, quinolone antibiotics (Ciprofloxacin – sorry Aradigm patients you are out of luck), warfarin.

http://www.healthyontario.com/DrugDetails.aspx?brand_id=1821&brand_name=Pennsaid

Voltaren gel:

Here is another Topical NSAID that has already been FDA approved for use in the United States. It is known as Voltaren Gel, and also contains Diclofenac. This drug is apparently available in Canada without a prescription. The drug is produced by a company called Novartis. http://www.newswire.ca/en/releases/archive/October2008/08/c3964.html

Please take the time to read these old, yet informative posts about Pennsaid vs. Voltaren

http://www.stockhouse.com/Bullboards/MessageDetailThread.aspx?p=17076023&m=17582818&r=4&s=NRI&t=LIST

http://www.stockhouse.com/Bullboards/MessageDetailThread.aspx?p=0&m=17076023&r=4&s=NRI&t=LIST

Now it appears that the one consumer thinks Voltaren is basically a last resort cream whereas Pennsaid is the cream of the crop. Coviden must agree or they would not have entered into agreement with Nuvo on June 16th.

Anyways… here is an interesting comparison taken from the Nuvo website:

Pennsaid

- liquid
- Applied four times per day
- 5 successful phase 3 trials
- 10 grams applied per day
- Signs, symptoms of OA
- Safe with oral NSAIDS
- Equivalent to oral NSAID

Voltaren gel

- gel
- 4 times
- 3 successful
- 32 grams
- Pain of OA
- label warning with use of oral NSAID’s
- no evidence on efficacy compared to oral NSAID’s

Anyways to sum up Nuvo’s topical competitor although they account for most of Europe’s Topical NSAID sales – they suck and will have trouble competing with Nuvo and Coviden’s massive launch of Pennsaid (hopefully Q1 2010). Furthermore, if successfully developed, Pennsaid plus with blow Voltaren gel out of the water.

Success in Canada and in Greece:

Pennsaid is clearing gaining popularity in the ~Old, not agile~ category – In 2008, Pennsaid sales of Pennsaid totaled close to $7 million dollars, up 37% from 2007. The increased popularity can be attributed to sales in Greece where 2008 was the first full year with Pennsaid on the market. Sales in Greece jumped 72.1% to $4.1 million from $2.6 million in 2007. Pennsaid now has the leading market share of Topical NSAID’s in Greece at 35% of the total revenue generated. With Coviden heading up the U.S sales and marketing of Pennsaid, you should look for sales a jump just as high as or even higher than in the first year of sales in Greece. Canadian sales of Pennsaid jumped 5% to $1.4 million.

In the Q1 of 2009, Pennsaid sales totaled $2,051 (up 18% from Q1 2008) putting Nuvo on the track to set a new sales record assuming Nuvo maintains or increases sales further. Pennsaid sales accounted for 86% and 88% of the companies’ total revenue for the first quarter. Greece sales also jumped another 17% to $1.3 million from $1.1 million, while sales to Paladin (Nuvo’s distributing partner) increased 41% to $.4 million.

With the high sales growth of Pennsaid in Greece and in Canada, there is no doubt in my mind that the 27 million old, not agile population of the United States will jump on Pennsaid – despite various physical limitations, as soon as Coviden releases it.

MICHAEL VLAICU YOU MAY NOT STEAL ANY OF THIS EITHER! GTFO