AVANIR Plans Commercial Launch of Nuedexta; Drug’s Potential to be Proven in the Market
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    Stock Alert for Avanir Pharmaceuticals (AVNR)

    Avanir Pharmaceuticals Inc. (AVNR) is a pharmaceutical company focused on developing and commercializing novel therapeutic products for the treatment of central nervous system disorders. In October 2010, the U.S. Food and Drug Administration (FDA) approved NUEDEXTA, a unique proprietary combination of dextromethorphan/quinidine, for the treatment of pseudobulbar affect (PBA). NUEDEXTA has also successfully completed a phase III trial for the treatment of patients with diabetic peripheral neuropathic pain (DPN pain). In addition to its focus on products for the central nervous system, AVNR also has a number of partnered programs in other therapeutic areas. Its first commercialized product, docosanol 10% cream, sold in the United States and Canada as Abreva by its marketing partner GlaxoSmithKline Consumer Healthcare, is the only over-the-counter treatment for cold sores that has been approved by the FDA. In 2008, the Company out-licensed all of its monoclonal antibodies and it remains eligible to receive milestone payments and royalties related to the sale of these assets.

    AVNR was incorporated in August 1998 and is headquartered in Aliso Viejo, California.

    Share Statistics (16-May-11) FY 

    2009

    FY 

    2010

    %  

    Chg

    Q4 

    2009

    Q4 

    2010

    %  

    Chg

    Symbol AVNR Revenue, $Mn 4.18 2.90 -30.6% 1.48 1.82 23.0%
    Current price $3.97 Gross marg. 97.8% 93.1% -4.8% 100.0% 100.0%
    52wk Range: $1.31-$5.80 Oper. margin -935.8% -666.4%
    Avg Vol (3m): 5,365,980 Net margin -526.3% -929.7% 76.6% -325.7% -665.4% 104.3%
    Market Cap. 482.64M
    Shares Outstanding 121.57M EPS, $ -0.28 -0.30 7.1% -0.06 -0.11 83.3%

    Source: Reuters.com, SEC Filings.

    Investment Highlights
    AVNR saw strength on Monday, with shares gaining almost 3% to close the session at $3.97, ahead of a presentation at this year’s meeting of the American Psychiatric Association (APA). About 16 million shares have traded hands during the session, versus the 10-day average volume of 7.92 million. The Company on Monday said data from a number of clinical research activities will be highlighted at the meeting, which will be held in Honolulu, Hawaii.

    AVNR recently announced its financial results for the second quarter of fiscal 2011. The Company reported total net revenue of $1.4 million for the three months that ended March 31, 2011, compared with $1 million for the comparable quarter in 2010.  Total operating expenses came in at $15.8 million in the second quarter of fiscal 2011, compared with $7.4 million in the same period a year ago. AVNR posted a net loss of $14.5 million, or $0.12 a share, compared to a net loss of $6.4 million, or $(0.08) a year ago. Analysts, on average, were expecting a loss of $(0.15) a share on revenue of $2.4 million, according to a poll by FactSet.

    AVNR reported NUEDEXTA gross and net revenue of $505,000 and $462,000, respectively, for the quarter. The total NUEDEXTA net shipments for the quarter were $3.1 million while net deferred revenue was $2.6 million. NUEDEXTA was launched in February this year.

    “With the mid-February launch of NUEDEXTA, the only FDA approved treatment for pseudobulbar affect, we have become a commercial stage biopharmaceutical company,” commented AVNR president and CEO Keith A. Katkin.  “I believe we are off to a promising start with over 1,000 new prescriptions through the end of March, representing the first seven weeks of launch. With a strong balance sheet, dedicated and talented employees, and plans for further clinical development, I believe Avanir is poised for a successful fiscal 2011.”

    As of March 31, 2011, the Company had cash, cash equivalents and investments in securities totaling $105.1 million, including cash and cash equivalents of $103.0 million and restricted investments in securities of $2.1 million.

    AVNR also recently announced the PRISM patient registry, the first patient registry to further quantify the prevalence and quality of life impact of pseudobulbar affect (PBA) in patients with a variety of underlying neurologic conditions. The Company said the PRISM registry aims to define the prevalence of PBA in patients with the associated underlying neurologic conditions of amyotrophic lateral sclerosis (ALS), multiple sclerosis (MS), Parkinson’s disease, stroke, traumatic brain injury (TBI) and Alzheimer’s disease. AVNR expects to recruit 10,000 patients into the registry across approximately 500 sites in the United States.

    Visit AVNR at www.avanir.com

    Financial Strength (16-May-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 18.20 1.91 1.86 0.69
    Current Ratio (MRQ) 18.28 2.30 2.29 1.02
    LT Debt to Equity (MRQ) 0.00 9.09 20.26 151.16
    Total Debt to Equity (MRQ) 0.00 11.28 24.93 198.11
    Interest Coverage (TTM) 0.18 1.72 17.31

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among four polled investment analysts. Against the Avanir Pharmaceuticals Inc company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 4 0 0 0 0 0
    4 weeks ago 4 0 0 0 0 0
    2 months ago 4 0 0 0 0 0
    3 months ago 3 0 0 0 0 0
    Last year 2 0 0 0 0 0

    The four analysts offering 12-month price targets for AVNR have a median target of 11.50, with a high estimate of 15.00 and a low estimate of 6.00. The median estimate represents a 197.93% increase from the last price of 3.86.

    Source: markets.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Jun-11 3 5.25 10.75 2.40 2.30
    Quarter Ending Sep-11 3 8.05 16.75 3.40 4.50
    Year Ending Sep-11 3 17.07 33.07 9.00 60.45
    Year Ending Sep-12 3 68.05 111.00 38.10 170.06
    EARNINGS (per share)
    Quarter Ending Jun-11 3 -0.13 -0.11 -0.15 -0.12
    Quarter Ending Sep-11 3 -0.13 -0.09 -0.15 -0.13
    Year Ending Sep-11 3 -0.49 -0.42 -0.54 -0.14
    Year Ending Sep-12 3 -0.37 -0.05 -0.67 -0.26

    Technical Analysis

    Source: http://stockcharts.com

    AVNR is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

    The MACD for AVNR currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    May16-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Bristol-Myers Squibb Company BMY 28.79 49.12B 13.09 13.84 2.40 2.69
    GlaxoSmithKline plc GSK 43.68 111.10B 11.81 10.95 2.47 2.37
    Eli Lilly & Co. LLY 39.15 43.53B 9.17 10.55 1.85 1.98
    Drug Manufacturers – Other Median 19.67 n/a 5.11 n/a
    Avanir Pharmaceuticals Inc. AVNR 3.97 482.64M 44.11 12.91 4.14

    Source: Thomson Financial

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