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Biotech Stock Mailbag: Xoma

Stocks in this article: XOMA CVM OHRP.OB IGXT.OB PATH

From what I can gather, the only advantage offered by IntelGenx's CPI-300 is this single-pill convenience. CPI-300 isn't more effective than regular bupropion; it isn't safer or better tolerated. All CPI-300 does is allow a patient who needs 450 mg of bupropion to swallow one pill every day instead of two pills every day.

Sorry, but there's nothing "novel" about CPI-300 especially when you consider that bupropion is generic. No insurance company is going to pay for CPI-300 over cheap, generic bupropion. Forget about it.

FDA rejected CPI-300 in 2010 citing problems with the drug's manufacturing and a food effect. IntelGenx claims to have resolved both issues. A new contract-manufacturing partner was brought on to make CPI-300, but how IntelGenx resolved the food effect issue is a bit unclear. A company spokesperson says CPI-300 was reformulated to show a food effect similar to what's seen with Wellbutrin XL but the data to support this reformulation wasn't provided.

Oh, I should also mention that after FDA rejected CPI-300 in 2010, IntelGenx's development partner Cary Pharmaceuticals walked away. IntelGenx says Cary gave up on CPI-300 due to lack of funds. Regardless, IntelGenx has no marketing partner for CPI-300, very little cash, no commercial or marketing infrastructure of its own and the stock trades on the bulletin boards. Current market cap: $33 million.

Sales of Wellbutrin and generic buproprion totaled $746 million in 2010, according to IMS Health. IntelGenx claims that high dose (450 mg) accounts for about 20% of sales, or $150 million. I'm unable to verify this claim but it's hard to see how CPI-300 would manage to eek out high single-digit market share even if the drug were to be approved.

Will M. asks, "What do you think about Ohr Pharmaceuticals (OHRP) and their eye drop for wet age-related macular degeneration? Have the results been promising and do you think it's a real threat to Roche's Lucentis and Regeneron Pharmaceuticals' (REGN) Eyelea? Or, have they not shown anything significant yet that could indicate that?"

Ohr Pharma acquired squalamine, the wet age-related macular degeneration drug, for $200,000 in 2009 at what was, in essence, a biotech assets garage sale following the demise of Genaera.

Genaera, for those that don't remember, was a small drug company that failed in its effort to develop squalamine (then known as Evizon) partly because Genentech (now Roche) was rolling out Lucentis at the same time and squalamine didn't improve vision well enough to compete.

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