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Rodman & Renshaw VTUS pdf 12-22-11
Rodman & Renshaw VTUS pdf 12-22-11
Rodman & Renshaw VTUS pdf 12-22-11
Rodman & Renshaw VTUS pdf 12-22-11
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Rodman & Renshaw VTUS pdf 12-22-11

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Ventrus Biosciences announced that S.L.A. Pharma has completed enrollment and randomization in the first pivotal Phase III study with diltiazem (VEN 307) for the treatment of anal fissures. VTUS has …

Ventrus Biosciences announced that S.L.A. Pharma has completed enrollment and randomization in the first pivotal Phase III study with diltiazem (VEN 307) for the treatment of anal fissures. VTUS has licensed the North American rights to diltiazem from S.L.A. Pharma and stated that initial top-line data from the study is expected to be available in May 2012. Importantly, the company also noted that trial enrollment occurred faster than initially expected.

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  • 1. ® First Take Ventrus Biosciences Inc (VTUS) Price: $7.60 (12/21/2011), Price Target: $25.00, Market Cap(MM): $94.3, Rating: Market Outperform Michael G. King, Jr., Senior Biotechnology Analyst 212-430-1794 mking@rodm.com VTUS Completes Enrollment in Pivotal Phase III Study of Diltiazem for Anal FissuresYesterday, Ventrus Biosciences, Inc. (VTUS, Market Outperform) announced that S.L.A. Pharma (Private) hascompleted enrollment and randomization in the first pivotal Phase III study with diltiazem (VEN 307) for thetreatment of anal fissures. VTUS has licensed the North American rights to diltiazem from S.L.A. Pharma and stated thatinitial top-line data from the study is expected to be available in May 2012. Importantly, the company also noted that trialenrollment occurred faster than initially expected.The Phase III trial is a randomized, double-blind, placebo-controlled study to evaluate the safety and efficacy ofdiltiazem hydrochloride cream in subjects with anal fissure and is being conducted in 31 centers in Europe. Theprimary endpoint, using an 11-point numerical pain rating scale (Likert-like scale), evaluates the change from baseline inthe average of worst anal pain associated with or following defecation for Week 4 (for the 7 treatment days immediatelypreceding the Week 4 visit). Consistent with the protocol for this trial, 465 patients have been randomized to diltiazemhydrochloride 2%, 4% cream, or placebo for 8 weeks of treatment, to be followed by a 4 week blinded observation period.VEN 307 (diltiazem cream) is a calcium-channel blocker that has been marketed in oral formulations for thetreatment of angina and high blood pressure for over two decades. Diltiazem hydrochloride cream is appliedpmierianally to treat pain related to anal fissure. It has been shown to normalize internal anal sphincter pressure and reduceanal maximal resting pressure, or MRP, and its vasodilator activity has the potential to improve blood supply, therebydecreasing the pain associated with anal fissures. On May 30, 2011, Ventrus received a Notice of Allowance for VEN 307from the USPTO.VTUS is maintaining its forward momentum with its late-stage assets and the future continues to look promising.We believe the company continues to make progress in moving its lead assets VEN 309 and VEN 307 forward in late-stageclinical development. Iferanserin (VEN 309) for the topical treatment of hemorrhoids began its first clinical trial in August2011 and is ongoing. This first Phase III trial for VEN 307 was initiated in November 2010 and, as noted above, top-linedata is expected in May, 2012. The company’s product candidate portfolio also includes topical phenylephrine (VEN 308)intended to treat fecal incontinence and is ready to enter Phase IIb trials. Please see Table 1 on page 2 for upcomingmilestones.We maintain our Market Outperform rating and $25 Price Target on VTUS shares. We reach our price target via adiscounted EPS model that includes 2017 royalty revenues of $90 million to yield a diluted EPS forecast of $4.27. We applya 35% discount rate in reflection of the current risk profile and a 35x multiplier as a conservative rate to account for thegrowth during that period to reach our $25.00 price target. For definitions and the distribution of analyst ratings, and other disclosures, please refer to pages 3 - 4 of this report.
  • 2. Ventrus Biosciences Inc December 22, 2011 Table 1: Key Upcoming Milestones Key Event Timing Additional results from VEN 309 market research 4Q11 Publication of German VEN 309 Phase III study 4Q11/1Q12 Progress update on VEN 307 extended release formulation 4Q11 Completion of Phase III trial enrollment for VEN 309 1Q12 VEN 309 recurrence data read-outs from first Phase III pivotal trial 2Q12 Launch of second VEN 309 pivotal and recurrence trial 2Q12 Launch of second VEN 307 pivotal trial 2Q12 VEN 309 Phase III top-line results June, 2012 VEN 307 Phase III top-line results May, 2012 VEN 307 NDA submission 2013 VEN 307 approval 2014 VEN 309 NDA submission 4Q14 VEN 309 approval 2015RODMAN & RENSHAW EQUITY RESEARCH 2
  • 3. Ventrus Biosciences Inc December 22, 2011 RODMAN & RENSHAW RATING SYSTEM: Rodman & Renshaw employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector, as defined by First Call. The price objective is calculated to estimate the potential movement in price a given equity could achieve given certain targets are met over a defined time horizon. Price objectives are subject to exogenous factors including industry events and market volatility. The risk assessment evaluates the company specific risk and accounts for the following factors, maturity of market, maturity of technology, maturity of firm, cash utilization, and valuation considerations. Potential factors contributing to risk: relatively undefined market, new technologies, immature firm, high cash burn rates, intrinsic value weighted toward future earnings or events. RETURN ASSESSMENT q Market Outperform (Buy): The common stock of the company is expected to outperform a passive index comprised of all the common stock of companies within the same sector, as defined by First Call. q Market Perform (Hold): The common stock of the company is expected to mimic the performance of a passive index comprised of all the common stock of companies within the same sector, as defined by First Call. q Market Underperform (Sell): The common stock of the company is expected to underperform a passive index comprised of all the common stock of companies within the same sector, as defined by First Call. RISK ASSESSMENT q Speculative - The common stock risk level is significantly greater than market risk. The stock price of these equities is exceptionally volatile. q Aggressive - The common stock risk level is materially higher than market level risk. The stock price is typically more volatile than the general market. q Moderate - The common stock is moderately risky, or equivalent to stock market risk. The stock price volatility is typically in-line with movements in the general market. Rating and Price Target History for: Ventrus Biosciences Inc (VTUS) as of 12-20-2011 02/02/11 05/03/11 I:MO:$12 MO:$25 25 20 15 10 5 0 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 2009 2010 2011 2012 Created by BlueMatrix RATING SUMMARY Distribution of Ratings Table IB Serv./Past 12 Mos Rating Count Percent Count Percent Market Outperform(MO) 108 60.00% 18 16.67% Market Perform(MP) 34 18.90% 4 11.76% Market Underperform(MU) 6 3.30% 0 0.00% Under Review(UR) 32 17.80% 5 15.62% Total 180 100% 27 100% Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.RODMAN & RENSHAW EQUITY RESEARCH 3
  • 4. Ventrus Biosciences Inc December 22, 2011 ADDITIONAL DISCLOSURES Rodman & Renshaw, LLC. (the "Firm") is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. ANALYST CERTIFICATION I, Michael G. King, Jr., hereby certify that the views expressed in this research report accurately reflect my personal views about the subject company(ies) and its (their) securities. None of the research analysts or the research analysts household has a financial interest in the securities of Ventrus Biosciences Inc (including, without limitation, any option, right, warrant, future, long or short position). As of Nov 30 2011 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Ventrus Biosciences Inc. Neither the research analyst nor the Firm has any material conflict of interest with Ventrus Biosciences Inc, of which the research analyst knows or has reason to know at the time of publication of this research report. The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The Firm or its affiliates did not receive compensation from Ventrus Biosciences Inc for any investment banking services within twelve months before, but intends to seek compensation from the companies mentioned in this report for investment banking services within three months, following publication of the research report. Neither the research analyst nor any member of the research analysts household nor the Firm serves as an officer, director or advisory board member of Ventrus Biosciences Inc. The Firm does make a market in Ventrus Biosciences Inc securities as of the date of this research report. Any opinions expressed herein are statements of our judgment as of the date of publication and are subject to change without notice. Reproduction without written permission is prohibited. The closing prices of securities mentioned in this report are as of Dec 21 2011. Additional information is available to clients upon written request. For complete research report on Ventrus Biosciences Inc, please call (212) 356-0500. Readers are advised that this analysis report is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. Past performance is no guarantee of future results.RODMAN & RENSHAW EQUITY RESEARCH 4

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