Horizon Pharma, Inc. (NASDAQ:HZNP)

CAPS Rating: 1 out of 5

Recs

2
Player Avatar zzlangerhans (99.77) Submitted: 10/24/2011 1:04:13 PM : Underperform Start Price: $7.33 HZNP Score: +12.56

I just reviewed Horizon Pharma, who IPO'd in August, and my initial assessment is ... blech. The company markets Lodotra, a programmed release formulation of low dose prednisone, for morning stiffness associated with rheumatoid arthritis. Prednisone itself has been generic for so long that I don't think anyone remembers if it was ever proprietary. The company asserts that Lodotra is timed to be most effective in the early morning hours when inflammatory cytokines are at their highest levels. I'm not motivated enough to investigate the science of this further, but my gestalt feeling is that prednisone's anti-inflammatory effects cannot realistically be timed so precisely. European rheumatologists would appear to agree, having prescribed only 1.3M worth of Lodotra last quarter. The company just submitted an NDA for US approval of Lodotra last month.

Six months ago the FDA approved the company's product Duexis for arthritis. Duexis is a combination of ibuprofen and famotidine, intended to ameliorate gastric side effects of the NSAID ibuprofen. As Pozen has already discovered, these types of products have limited appeal, especially in a time of increased scrutiny of medical expenses. Most providers would be more inclined to simply prescribe the two cheap generics separately. No revenues have yet been reported for Duexis, but I'm not expecting impressive results.

The rest of the pipeline, comprising TruNoc purified flurbiprofen enantiomer and HZN-602 naproxen/famotidine, also draws from the well of me-too and superfluous. The stock recently plunged below 5 from the post-IPO range of 8-9 after the company filed the Lodotra NDA, but has subsequently recovered and is nearing prior range. I don't think the recovery will survive the gathering economic storm that will cut deeply into the share prices of most speculative stocks.

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Member Avatar OklaBoston (67.43) Submitted: 12/20/2011 6:17:50 PM
Recs: 0

I seem to have opened my own "Outperform" pick on this a bit too soon, but take a look at the insider buying numbers at www.secform4.com. I wish I'd learned about that site sooner than I did. A LOT sooner!

Member Avatar OklaBoston (67.43) Submitted: 3/3/2012 3:50:20 PM
Recs: 0

I'm entering a new "Outperform" pick on this since insiders have paid as much as $9.00/share and the charts look like a bottom forming.

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