Pozen is already partnered with such pharma giants as GlaxoSmithKline, Johnson & Johnson, and AstraZeneca. This tells us Pozen's management has experience with gaining partnership deals with large pharmas.
The graphic at Pozen's website shows the rest of Pozen's marketed and pipelined solutions. It is worth noting that the company has other solutions that will also see NDA filings within the next year.
Pozen was profitable for the first two quarters of 2012, before showing a loss in the last two quarters of the same year. This was in part due to less than expected sales from Vimovo, which is partnered with AstraZeneca. AstraZenca may have priced Vimovo too high at $4 a day, causing the drug to lose market acceptance. However as Jason Napodano reported in his article, AstraZenca may become more aggressive in its price point for the drug. Furthermore, AstraZeneca has filed Vimovo in 80 countries, receiving approval in 60 countries, and is currently launched in 40 countries. This leaves about 40 countries left for approval and roll out of the drug, which will equate to more revenue for Pozen moving forward.
Share StatisticsAvg Vol (3 month): 96,155Avg Vol (10 day): 137,488Shares Outstanding: 30.31MFloat: 24.52M% Held by Insiders: 11.15%% Held by Institutions: 66.20%Shares Short (as of Jan 15, 2013): 1.70MShort Ratio (as of Jan 15, 2013): 17.80Short % of Float (as of Jan 15, 2013): 6.40%Shares Short (prior month)(3): 1.71M
The stock price and volume have been increasing steadily over the last two weeks or so. With nearly 6.4% of the float held short, Pozen makes for a decent short squeeze candidate. Institutional ownership is high, especially for a stock selling in the high $5 range like Pozen.
With a market cap of $173.06M, we believe that Pozen is undervalued by about $100M when considering the market opportunity for its PA platform, 40 more countries to roll out Vimovo, and the likeliness of a partnership for PA32540 which as already mentioned, should net at least a $30M upfront payment.
From the chart we can observe that the stock appears to be reversing the extended down trend it has seen since May of last year. It appears to me that catalyst traders and investors are accumulating the stock. With the NDA filing for PA32540 expected in April, and the likeliness of the company gaining a significant partnership with the drug before then, a short term price appreciation to the $6.50 range looks to be in short order.
Disclosure: Author Scott Matusow is Long POZN.
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