Cancer diagnostics company Neoprobe (NYSE Amex:NEOP) reported a $2.2 million loss in the second quarter, but with this company the financials rarely tell much of the story.
The company’s primary focus is on preparing a New Drug Application (NDA) for its radiopharmaceutical Lymphoseek that, if approved, would give the company the right to begin marketing the drug, which Neoprobe says has a worldwide market potential of $450 million.
In the Dublin, Ohio-based company’s second-quarter earnings announcement, CEO Mark Pykett said the company expects to announce the submission of the NDA within the next 30 days or so. “We are finalizing the integrated NDA document and completing the final quality checks of our electronic submission and look forward to announcing the submission within the next month,” he said.
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“We have great confidence in the superiority of Lymphoseek and its commercial potential, and anticipate a favorable FDA review of our application,” Pykett continued.
Pykett told MedCity News last week that the company expects an FDA decision on the Lymphoseek NDA around the middle of next year. The FDA typically takes around 30 to 60 days to accept a filing for review, and then the review itself could take around 10 months.
Lymphoseek is a radiopharmaceutical used by surgeons to identify lymph nodes in patients with breast cancer or melanoma and to indicate whether cancer has spread to a particular lymph node.
It’s been a rollercoaster ride the last few months for investors focused on Neoprobe’s stock price. Shares were up 166 percent on the year until a short seller began agitating about concerns around the trial design for Lymphoseek. Shares are down nearly 50 percent since Martin Shkreli, the short seller, took his complaints public.
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Neoprobe’s army of retail investors who congregate on message boards have charged all along that Shkreli’s public campaign was merely designed to enrich himself as the company’s shares tumbled — and they may be right. (Of course, investors who are long on Neoprobe aren’t exactly neutral observers themselves.)
Then on Friday Neoprobe’s stock tumbled 15 percent when a small, private company called Pharmalucence announced that it had received FDA approval for a lymph node location agent, with investors fearing the product would be a competitive threat to Lymphoseek. But, on Monday the stock shot right back up again, 10 percent, when Neoprobe issued a press release pointing out the other lymph node location agent’s approval meant that Neoprobe was likely to be taking the correct regulatory approach.
A few research notes from investment banks paint a different picture than Shkreli does.
“We believe the current valuation represents an attractive entry point and recommend accumulation of Neoprobe shares in anticipation of the NDA filing,” said a Monday investors’ note from investment bank Morgan Joseph TriArtisan.
Neoprobe executives are scheduled to hold a conference call with investors and analysts Thursday morning.
