Third Quarter 2020 Financial and Operational Results
Titan Pharmaceuticals, Inc. (NASDAQ:TTNP) abandoned its efforts to commercialize Probuphine and has refocused its activities on the development portfolio. Titan has been actively working on the nalmefene project for the prevention of opioid relapse and stepped into the pruritus space with the acquisition of JT Pharma’s kappa opioid receptor agonist peptide implant. Both of these projects leverage the company’s ProNeura platform. ProNeura allows for continuous drug release and non-fluctuating medication levels over a period of three months to a year depending on drug characteristics. Other important events include the settlement of debt with Molteni and Horizon and the raise of $8 million in capital from a public offering.
In the third quarter, revenues were $1.1 million, with a majority of the amount sourced from the nalmefene grant. Results from the reporting period are summarized in Titan’s earnings release, Form 10-Q and conference call presented to investors on November 16, 2020. Management held a short call with investors to identify the pathway forward after Probuphine.
Third quarter total revenues were $1.1 million compared to $947 thousand in the prior year period. Grant revenues in 3Q:20 were $1.0 million compared with $757,000 in 3Q:19; product revenue fell to $102,000 from $190,000. Gross margin remained negative as cost of goods sold exceeded product revenues. Research and development expenditures totaled $1.6 million, down a slight 4% from the comparable period in the year before. General and administrative spend rose to $3.5 million, up 17% from 3Q:19 levels. Total operating expenses were $5.1 million, up 10% from the third quarter last year. Net loss was ($4.9) million or ($0.05) per share compared to a net loss of ($2.8) million and ($0.18) per share in 3Q:19.
Since regaining control of Probuphine in 2018, Titan has taken several steps to advance the commercialization of the addiction treatment implant. Despite efforts on multiple fronts to advance the product, sales stubbornly held below $1 million per year. In October 2020, Titan’s board decided to wind down its US Probuphine business and focus on the development pipeline with ProNeura.
Starting in October 2017, Titan conducted a feasibility assessment with Opiant to develop a product for prevention of opioid relapse and overdose in individuals with opioid use disorder (OUD). In September of 2018, Titan secured a grant from the National Institute for Drug Addiction (NIDA) to further this research using a ProNeura-based six-month implantation formulation of nalmefene. The grant will provide $2.67 million during the first year and $6.08 million in the second year. The goal during the first two years is to complete IND-enabling work. Based on further discussions with the FDA during the second quarter, Titan was advised to pursue the traditional 505(b)(1) pathway for approval of nalmefene due to the lack of safety data in a long acting formulation. This approach will require an additional study to be performed and additional preclinical work to be completed for another project that is already underway. There are additional years of funding that may be accessed if certain milestones are achieved. With the additional work required, Titan expects to file the investigational new drug application (IND) in 2021.
JT-09, Kappa Opioid Agonist Peptide
In late October, titan announced that it would be acquiring JT-09, a kappa opioid agonist peptide to be used in combination with the ProNeura implant technology. The active pharmaceutical ingredient will be used for treatment of moderate to severe chronic pruritus. The transaction was completed on November 2nd. The program has a target of establishing proof of concept in the first half of 2021.
Based on the change in strategic direction and the lack of any revenue generating products or clinical candidates in the pipeline, we are discontinuing coverage of Titan Pharmaceuticals and withdraw our estimates and price target.
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