KEH emails, "What are your thoughts on Transdel Pharmaceuticals ( TDLP.OB)?" I dinged Transdel in this column last October for spinning negative phase III study results of the company's topical pain drug ketotransdel. Since then, new management has taken over Transdel's reins and the company appears to be walking back some of the more outlandish claims made in the past. That's progress of sorts. The biggest obstacles standing in front of Transdel today are a serious lack of money and questions about the proprietary value of its topical (transdermal) drug delivery technology. Transdel takes generic drugs and formulates them into a cream that patients can spread on their skin. Ketotransdel, the company's lead product, is a skin cream formulation of the non-steroidal anti-inflammatory drug ketoprofen. A pain reliever that someone can spread on achy joints or muscles quickly (and avoid systemic exposure of the drug) is a good idea. It's not an original idea, however. Endo Pharmaceuticals ( ENDP) already sells Voltaren, an NSAID gel pain reliever. Other companies have gel or cream-based drug delivery technology as well. Transdel says patients will prefer ketotransdel's cream-based formulation over a gel like Voltaren because the cream absorbs into the skin faster and is less messy. Transdel's probably right here -- creams are generally preferred over gels -- but Transdel doesn't have any data yet comparing the safety and efficacy of ketotransdel to Voltaren. The first phase III study of ketotransdel ran into some problems when the primary endpoint (reductions in pain scores) on an intent-to-treat basis failed to reach statistical significance. Transdel went back and found 35 patients who should not have been enrolled in the study. When these patients are excluded in a "modified intent-to-treat" analysis, ketotransdel was able to demonstrate a statistically significant reduction in pain scores compared to placebo, with an okay-but-less-than-hefty p value of 0.038. Transdel hopes FDA will accept this retrospective, modified intent-to-treat analysis, but admits in SEC filings that there is "no assurance" FDA will do so. Regardless, Transdel needs to run a second, confirmatory phase III study before seeking ketotransdel's approval. The company doesn't have the money for such a study right now, but is seeking a partner willing to pay for it in exchange for commercial rights. Transdel will run out of money at the end of year unless it can raise more money, either through a partnership or the sales of stock/debt. If FDA doesn't accept the data from the first study, Transdel or a partner will be forced to run two new phase II studies and ketotransdel's progress will be significantly delayed. Voltaren is on an $80 million annual run rate after the first quarter, so that gives you some idea of the commercial potential for ketotransdel. I'd be careful, however, before assuming Transdel can totally replace or even take a significant bite from Endo's market share without seeing more data on ketotransdel. Also note that Endo's Voltaren is approved for pain relief from osteoarthritis, which is a broader and superior label than what Transdel might get from the "soft tissue injury" patients enrolled in Transdel's first phase III study. At around a $1.10 a share and an enterprise value of under $18 million, Transdel is not exactly pricing in much for ketotransdel's potential approval and commercial success, assuming only one additional phase III study is required.
Phil asks, "Just a quick thanks for your excellent coverage of the Vivus ( VVUS) FDA advisory panel hearing with your live blog earlier this month. A tough job for sure -- listening, typing (faultlessly, no less) and responding to listeners queries. I was wondering if you are also planning to live blog the Arena Pharmaceuticals ( ARNA) panel as well? With all the interest the Vivus panel generated, I'm sure you'll have another huge audience." Thanks Phil, and yes, I am planning to live blog the Arena Pharma FDA advisory panel tentatively scheduled for Sept. 16. Stay tuned for more details. The live blogs of FDA advisory panel meetings have proven to be very popular so I'm expanding coverage to meet demand. My plans right now are to provide live coverage of the following FDA panels: Jazz Pharmaceuticals ( JAZZ) (JZP-6 for fibromyalgia) on Aug. 20; MELA Sciences ( MELA) (MELAFind for melanoma detection) in November; and Orexigen Therapeutics ( OREX) (Contrave for obesity) on Dec. 7. I'm interested in covering the FDA panel for Alkermes ( ALKS) (Vivitrol for opioid dependence) on Sept. 16 as well, but first I need to figure out how to clone myself. -- Reported by Adam Feuerstein in Boston. Follow Adam Feuerstein on Twitter.