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NEOP/NAVB Analysis - Spec. Buy

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by , 03-03-2012 at 05:04 PM (15148 Views)
NEOP/NAVB Analysis (Navidea is focused on diagnostic and radiopharmaceutical imaging agents)

As I'm out of ACTC for a bit, I am reviewing some of my favorite
stocks on my watch list and decided to focus on my 2nd favorite stock
which Iím not currently in at the moment. Here goes for my first full
analysis of NAVB/NEOP.

Core Summaries:
Company first opened up business and became an initial public offering
around 1992. Their first money maker was Neo2000 Gamma Detection
System (GDS) which was their main revenue for a long time. For awhile,
the company main focus was to create technology to detect early stages
of various cancers which turned them into a world leader in gamma
detection technology.

While the GDS helped obtain them revenue, the company worked on
another type of early detection called Lymphoseek Radiopharmaceutical
which is patented. The system is an upgraded and redesigned GDS which
was successful for them initially. However, instead of relying solely
on Gamma and devices to detect certain cancers at early stages they
combined it using new research by oncology surgeons of following the
lymph node system as targeting cancer cells. Lymphoseek at the moment
are past Phase I, II and just recently completed Phase III in 2011.
They are also way ahead by filing for a NDA back in August 2011 and
should be approved/rejected somewhere around April/June 2012.

Check out the detailed information of the actual program and why using
lymph makes sense with a higher accuracy of finding the cancer cells.
The most important reason why I want to get back in is they have meet
and exceeded the primary end points for Phase III Trials. One of the
biggest reason why Iím interested is instead of big pharm. always
trying to cure or treat late stages cancer or other diseases, NEOP/
NAVB are trying to develop ways to target them early on in the stages.

Competitors:
Biggest competitor to the Lymphoseek system is a couple year old
decade vital blue dyes which also uses the lymph node system. NEOP/
NAVB used this as a comparison since the blue dye is designated as the
"Truth Standard" Comparator. The company pretty demolishes the so
called truth standard with the following results:
Lymphoseekģ (Tilmanocept) Meets All Endpoints in NEO3-09 Phase 3 Study | Business Wire

Partnership:
The company has signed with one of the largest health care distributer
Cardinal Health which they gave up a good portion of the market to use
Cardinal Health. Under the terms of the agreement Neoprobe and
Cardinal Health will receive a 50%/50% revenue split and Neoprobe will
receive up to $3M upon the achievement of certain sales milestones by
Cardinal Health.
Healthcare Sales & Marketing Network: Neoprobe and Cardinal Health Sign Distribution Agreement for Lymphoseek (HSMN NewsFeed)

In an interesting turn of events to improve their balance sheet and
obtain more cash reserves, they sold their only product line bringing
in their revenue to Devicor Medical Products for $30 Million in Cash
and up to $20 Million in Roylaties. I was very surprised by this move,
but at the same time gave me the feel of confidence by the company
they were not even one bit worried about FDA rejecting their
application since they met all primary end points and far exceeded
anyone expectation in the Phase III Trials.
Neoprobe to sell gamma detection business | BioTuesday


The Bad:
For the past year, the company has been a perfect target for Shorts.
One of the leading Shorters was Martin Shkreli which in my opinion
played his cards perfectly. He single handedly destroyed the PPS with
his multiple articles and even submitted a civilian application to the
FDA to not accept NEOP market application (which later got approved to
be review). But, the damage was done and the stock PPS drop nearly to
a half. Later on he closed his short and moved on to his next target.
Healthcare Sales & Marketing Network: Neoprobe and Cardinal Health Sign Distribution Agreement for Lymphoseek (HSMN NewsFeed)

The Short Case for Neoprobe: Skeptical of Its Primary Asset's Success - Seeking Alpha

Neoprobe: Why I'm Closing My Short Position - Seeking Alpha

Speculation Factors:
They are currently in the stage of waiting for approval/rejection of
their Lymphoseek System which if approved they will IMO destroy the
blue dye currently being used and be the gold standard for every
hospital. As all risks in the healthcare world, they can be rejected
will ultimately destroy their only possible money maker.

They have a potential billion dollars market target using their Rig
Scan program which was killed then recently started up again. It is
still years away from the market, but this could ultimately make this
company a big hit.

Conclusion:
I was in this company a year ago and got in days before Martin hit
NEOP hard with his short tactics which destroyed the PPS. After the
shorts left and NEOP changed their company branding to NAVB then
completely refocus on the Lymphoseek to be approved and bringing up
RIGScan Iím pretty confident they will be successful. Add that with
the potential date of being approved by June 2012, Iím seeking to open
a considerable amount of position in the late February/early March
deadline. If approved, Lymphoseek will be targeting a potential $450
million dollars market as it includes Breast, Head & Neck Squamous,
Melanoma, Colon, and Prostate Cancers.

Old Report, but most resourceful: http://www.tripointglobalresearch.co...ort_092210.pdf
Good resources on the other programs
http://lifetechcapital.com/ltc/wp-co...n-03-25-11.pdf
http://lifetechcapital.com/ltc/wp-co...e-04-01-11.pdf
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Comments

  1. LutfiyahGroup's Avatar
    Good luck for your new investment but NAVB not interested.
    sticking to my NASDAQ:ACTC lol

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