Parnell
Pharmaceuticals Holdings Ltd PARN $17.00-$19.00
3.6 million shares Underwriters: Jefferies, Piper Jaffray Co-Managers: JMP Securities,
Ladenburg Thalmann & Co., Geller Biopharm Proposed
trade date of 6/18 They are a fully integrated pharmaceutical company focused on developing,
manufacturing and commercializing innovative animal health solutions.
Parnell
Pharmaceuticals Holdings Ltd PARN
- 3,600,000
shares to be offered between $17.00 and $19.00 per share
- Underwriters:
Jefferies, Piper Jaffray
Co-Managers: JMP Securities, Ladenburg Thalmann & Co., Geller
Biopharm
- Proposed
trade date of 6/18
- Rating
= 2
Click here
to view the prospectus.
http://www.sec.gov/Archives/edgar/data/1603429/000114420414036344/v380837_f1a.htm
Company
Overview
They are a fully integrated pharmaceutical company
focused on developing, manufacturing and commercializing innovative animal
health solutions. They
currently market five products for companion animals and production animals in
14 countries and augment their pharmaceutical products with their proprietary
iKAM and mySYNCH® software platforms. These innovative technology solutions
are designed to enhance the quality of life or performance of animals, while
driving their customers’ operational efficiency and profitability. They believe
their value-added solutions help establish them as a business partner with their
customers rather than only as a commodity provider, differentiating them from their
competitors.
In the last decade, they have significantly enhanced
their core competencies across the entire pharmaceutical value chain. A key
strength of their business is their clinical trial and regulatory development
experience. They have conducted over 31 clinical trials across six countries in
70 trial sites during the last ten years. Their products have been approved by
regulators in the
Their
lead reproductive hormone products, estroPLAN® and GONAbreed®, are designed to
safely and effectively improve cattle breeding performance and are currently
marketed in 12 countries. They were
the first company to achieve FDA approval for the indication of estrous
synchronization in lactating dairy and beef cows. They market their
reproductive hormone products in conjunction with their proprietary software
platform, mySYNCHTM, in order to deliver superior breeding outcomes. Since
launching in the
Their
disease-modifying product, Zydax®, for the treatment of osteoarthritis, or OA,
in dogs and horses, stimulates the growth of new cartilage and inhibits
cartilage breakdown. OA is a
slowly progressive and often severely debilitating degenerative joint disease. They
estimate that the market for OA in animals in the U.S. and the European Union,
or EU, is over $410 million in annual sales of prescription drugs and the
global market for alternative treatments is at least another $500 million in
annual sales. The most common treatments for OA are anti-inflammatory drugs,
which ease symptoms but do not address the underlying disease process. By
contrast, Zydax is designed to enable veterinarians and animal owners to safely
and effectively manage the cause of OA. Zydax has an excellent efficacy and
safety profile, with one million doses sold, and has led to improved quality of
life for dogs and improved performance of sport horses. They have
marketed Zydax in
They
believe their products are differentiated through their complementary software
platforms designed to assist their customers in maximizing the performance and
efficiency they can derive from their products. iKAM, for companion animals, and mySYNCH, for dairy
producers, provide their customers with a personalized software solution which
is provided as a free service offering to their customers loaded onto a
complementary tablet device. This software platform provides mobile and
interactive education and diagnostics, data analytics and customer management
capabilities. iKAM and mySYNCH also provide them with direct interaction with
animal owners to manage and personalize their brand experience with their
products. Their technology offerings enable them to partner with
veterinarians and key distributors to increase customer interactions, brand
recognition and overall customer satisfaction.
Their current revenues are derived from operations
in 14 countries, with a direct marketing presence in
They believe that their fully-integrated,
pharmaceutical value chain positions them to effectively and efficiently
leverage their current product portfolios, expand and scale their pipeline of
product candidates, elicit attractive in-licensing or acquisition opportunities
and seek vertical opportunities as a contract services provider. They believe
that the combination of these capabilities and opportunities positions them to
become a leading innovator in animal health products.
Their Products and
Product Candidates
In addition to their currently marketed products, they
are developing a pipeline of clinical drug candidates that seek to deliver
solutions to address unmet needs in companion animal health or address
practical and financial challenges that veterinarians and farmers encounter with
existing production animal therapies. Currently, they have seven product
candidates for the treatment of up to 12 indications across several therapeutic
areas and animal species in their pipeline. They also intend to leverage their
established developmental capabilities to advance multiple in-house and
in-licensed pipeline opportunities.
The following table presents information regarding their
commercial products and their products under development.
![[GRAPHIC MISSING]](PARN_files/image001.jpg)
In addition to developing therapeutics that deliver
real solutions to unmet animal health needs, they believe some of their
product candidates, including Zydax, PAR081, PAR121 and PAR122, may have the
potential to be applied to human health. Assuming successful development of
each of these product candidates for the animal health market, they would seek
to partner with organizations that can assist in assessing the feasibility and potential
development of these product candidates for human applications.
IPO
Detail
This is the initial public offering of Parnell
Pharmaceuticals Holdings Ltd and no public market currently exists for its
common stock. Parnell Pharmaceuticals Holdings Ltd is offering shares of common
stock as described in the prospectus. The company expects the initial public
offering price of its common stock to be between $17.00 and $19.00 per share.
The company has applied to list its common stock on the NASDAQ Global Market under
the symbol “PARN.”
|
Ordinary shares
offered by the company |
3,240,000 shares |
|
Common stock
offered by the selling shareholder |
360,000 shares |
|
Common stock to
be outstanding immediately after this offering |
11.526.722
shares |
Use of
Proceeds
They
estimate that they will receive net proceeds from this offering of
approximately $52.1 million. The principal reasons for this offering are to
increase their capitalization and financial flexibility, increase their
visibility in the marketplace and create a public market for their ordinary
shares. They intend to use the net proceeds as follows:
•
approximately $25.0 million to repay then-outstanding principal amount, and
$1.7 million in then-outstanding interest amounts under their credit facility
with SWK Funding LLC, dated as of January 23, 2014, which matures on January
23, 2021. The SWK credit facility carries an effective interest rate of 17%. They
used proceeds from the facilities to repay outstanding amounts under a prior
credit facility and to fund their operations.
•
approximately $10 million to $20 million for the further development of their
product candidates and approximately $10 million for expansion of their
commercial infrastructure in anticipation of future product launches and for
other general corporate and working capital purposes.
They
may also use a portion of their net proceeds to in-license or acquire
additional product candidates, technologies or businesses; however, they currently
have no agreements or commitments to complete any such transaction.
Competition
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Company |
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Stock Symbol |
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Exchange. |
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Zoetis
Inc. |
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ZTS |
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NYSE |
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Bayer AG |
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BAYN |
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XETRA |
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Merck
& Co., Inc. |
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MRK |
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NYSE |
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Sanofi
SA (ADR) |
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SNY |
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NYSE |
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Boehringer
Ingelheim GmbH |
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Private |
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Ceva Inc. |
C |
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CEVA |
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NASDAQ |
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Vetoquinol
SA |
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VETO |
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EPA |
Market
Pet Therapeutics and Production Animal Markets
The companion
animal market is typically characterized by products for dogs, cats and horses.
Pet ownership and per capita spending on pets is increasing globally as pet
owners desire to foster a strong, long-lasting, human-animal bond.
Key factors
contributing to the growth of companion animal products include:
·
Increasing pet ownership;
·
Growing disposable incomes,
particularly in emerging markets;
·
Increasing medical needs of
companion animals as they live longer and begin to experience many of the
medical conditions seen in older humans; and
·
Growing emphasis on
development of new medical therapies specifically for pets.
The American
Pet Products Association, or APPA, reports
The production
animal health industry is primarily focused on providing vaccines and
pharmaceuticals. The industry
is growing in response to increasing food demands from a growing global
population. As standards of living improve, people’s appetite for animal
protein grows. Therefore, it is important to consumers and livestock producers
that the food supply is safe and nutritious and that livestock herds are kept
free from disease by using proper husbandry, appropriate medicines, and vaccines.
As a result, livestock owners are always looking for ways to improve
production efficiency through the use of new, innovative, animal health
products.
Reproductive Hormones — estroPLAN and GONAbreed
They
currently have two approved reproductive hormone products in the
There are
approximately 9.2 million dairy cows in the
For a cow to
produce milk, it must calve every year. Efficiently re-establishing
pregnancy across the entire milking herd has long been, and remains, a pivotal
economic driver in commercial dairying with nearly all modern dairy herds bred
by artificial insemination. In the weeks following calving, the uterus must
return to a normal state in order to become ready for the next pregnancy.
During this period, which is typically 60 days, cows are prepared for
re-breeding. The objective on all dairy farms is to get cows pregnant as
quickly as possible after the voluntary wait period to ensure the optimal
length of lactation (milking). In the
Although the
active ingredients in both estroPLAN and GONAbreed are generic, there are
opportunities to innovate the way the drugs are used in combination. For example, they have recently filed a method of
use patent for a new breeding program, PROCEPT®, which is intended to increase
conception rates from artificial insemination programs compared to the traditional
combination use in what are called Ovsynch programs. They believe that a
successful launch of the PROCEPT breeding program would solidify their position
as a leader in clinical science insofar as they would be the first company to
bring a new breeding program to the market for dairy and beef cows in many
years.
There are
approximately 150 million pet dogs and cats in the
In addition, they
believe there is a specific market for using PAR081 in cats as they are
particularly susceptible to hypersensitivity from commonly used excipients such
as benzyl alcohol, which is an anti-bacterial agent used in many sterile drugs
including the currently available veterinary propofol products. The
toxicity of benzyl alcohol in cats is greater than in other species. In
addition, prolonged or repeated dosing of propofol in cats has reportedly
resulted in Heinz body formation (a disorder of the red blood cells). They are
developing PAR081 to address the market for propofol in cats.
Supply of the
human propofol market has been impacted by highly publicized product outages in
recent years due to FDA product recalls and citations of manufacturing facilities
for particulate contamination. This has resulted in lengthy product shortages
in the hospital system and culminated in the withdrawal of one of the three
main suppliers from the market. The formulation they intend to develop for
veterinary use may have a simple transition to human use which could
dramatically enhance the market opportunity for PAR081.
They are
developing PAR121 to bring novel advantages to the management of bone injury in
dogs and horses. If recovery
were accelerated, performance animals with bone injuries could potentially
return to competition earlier, and pets with fractures could be mobile sooner.
Earlier quality-of-life restoration would reduce treatment and care costs and
responsibilities for owners of dogs and horses sustaining bone injuries
treatable with PAR121.
There are
approximately 150 million pet dogs and cats in the
There are
estimated to be 9.2 million horses in the
In human
medicine, bone growth factors such as Bone Morphogenic Proteins, or BMPs, have
entered the human market in recent years. BMPs are applied directly to the
bone during surgery to promote bone healing. They believe that PAR121 could be
a superior product offering to BMPs as it would not require surgical
intervention to be applied yet it may achieve similar outcomes in promoting
bone healing.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
(in thousands,
except percentages) |
||||||||||||||||||||||
|
|
|
Nine |
|
Nine |
|
v% |
|
Year Ended |
|
Year Ended |
|
v% |
||||||||||||
|
Revenues |
|
|
4,301 |
|
|
|
4,581 |
|
|
|
(6 |
%) |
|
|
9,538 |
|
|
|
6,291 |
|
|
|
52 |
% |
|
Other
Income |
|
|
2,063 |
|
|
|
1,206 |
|
|
|
71 |
% |
|
|
2,203 |
|
|
|
6,319 |
|
|
|
(65 |
%) |
|
Costs
and expenses |
|
|
15,273 |
|
|
|
8,740 |
|
|
|
75 |
% |
|
|
15,893 |
|
|
|
11,941 |
|
|
|
33 |
% |
|
Income/(loss)
before income tax |
|
|
(8,909 |
) |
|
|
(2,953 |
) |
|
|
(202 |
%) |
|
|
(4,151 |
) |
|
|
670 |
|
|
|
(720 |
%) |
|
Income
tax (expense)/benefit |
|
|
2,532 |
|
|
|
369 |
|
|
|
586 |
% |
|
|
673 |
|
|
|
(603 |
) |
|
|
(212 |
%) |
|
(Loss)/income
for the period |
|
|
(6,377 |
) |
|
|
(2,584 |
) |
|
|
(147 |
%) |
|
|
(3,478 |
) |
|
|
67 |
|
|
|
(5,265 |
%) |
|
Other
comprehensive income/(loss) for the period, net of tax |
|
|
(626 |
) |
|
|
85 |
|
|
|
(835 |
%) |
|
|
(32 |
) |
|
|
126 |
|
|
|
(126 |
%) |
|
Total
comprehensive income/(loss) for the period |
|
|
(7,003 |
) |
|
|
(2,499 |
) |
|
|
(180 |
%) |
|
|
(3,510 |
) |
|
|
193 |
|
|
|
(1,920 |
%) |
|
Earnings
per share: |
|
|
Cents |
|
|
|
Cents |
|
|
|
|
|
|
|
Cents |
|
|
|
Cents |
|
|
|
|
|
|
Basic
and diluted |
|
|
(78 |
) |
|
|
(34 |
) |
|
|
|
|
|
|
(46 |
) |
|
|
1 |
|
|
|
|
|
|
Weighted-average
shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted |
|
|
8,143,647 |
|
|
|
7,518,599 |
|
|
|
|
|
|
|
7,518,599 |
|
|
|
7,523,599 |
|
|
|
|
|
Balance
sheet data:
|
|
|
|
|
|
|
|
||||||
|
|
|
(in thousands) |
||||||||||
|
|
|
At |
|
At |
|
At |
||||||
|
Cash
and cash equivalents |
|
|
4,284 |
|
|
|
860 |
|
|
|
78 |
|
|
Total
Assets |
|
|
35,900 |
|
|
|
31,563 |
|
|
|
26,681 |
|
|
Borrowings,
including current portion |
|
|
30,105 |
|
|
|
20,200 |
|
|
|
11,943 |
|
|
Ordinary
Shares |
|
|
5,423 |
|
|
|
3,104 |
|
|
|
3,105 |
|
|
Total
Equity |
|
|
(2,296 |
) |
|
|
2,388 |
|
|
|
6,579 |
|
Target
Markets
Capturing
market share of reproductive hormones in the U.S. Their
product and technology solutions are designed to maximize customer outcomes and
develop brand recognition with these customers. They market their solutions
through a newly-established direct sales force covering the top 20 states in
the dairy sector, representing 80% of the dairy cows in the
Completing
their regulatory development of Zydax for launch in the
Expanding
their market share of Zydax for dogs in
Expanding
their innovative OA therapeutic offering in
Continuing
development of existing pipeline products. They plan
to progress the remainder of their current pipeline of product candidates
through proof-of-concept stage and in to animal studies in 2014 and 2015.
Expanding
their existing pipeline. Their goal is to bring a new product to
market each year commencing in 2015 through a combination of business
development and potential in-licensing activities. They are currently reviewing
the attractiveness and feasibility of several potential new projects. As a
result, they expect their pipeline to continue to expand as they pursue
congruent opportunities.
Developing
market entry plans for
Maintaining
market share in their established reproductive hormone markets through the
roll-out of the next generation of mySYNCH tools. They plan
to solidify their market position in
Expanding
their global Sales and Marketing capabilities. They
expect to expand their current sales and marketing capabilities in order to
market and distribute their current and pipeline product candidates in all
major markets they seek to enter. They will do this through a combination
of a direct presence and strategic partnerships. In those markets where they
elect to establish a direct presence, they will seek to replicate the
successful business model they have used in
Identifying
and pursuing contract manufacturing opportunities. They have
constructed and commissioned their manufacturing facility in
Company's
Unique Strengths
They
believe that injection is the appropriate means of providing progesterone
priming and that insertion of intravaginal retained devices for seven days is
impractical, uneconomic and has inferior animal welfare outcomes.
By enabling
improved pregnancy outcomes with substantially less time and labor, less risk
for implementation errors and improved cow comfort is expected to have strong
appeal to the market.
The low
dose of P4 delivered in a GONADOPRO injection and its rapid metabolism indicate
a likely safe meat and milk residue profile, making it likely that there will
be little to no impact on human food chain safety.
They
believe a particular opportunity exists for using PAR081 in procedures
requiring up to one hour of anesthesia or deep sedation and they expect that these short procedures such
as neutering and minor surgical procedures comprise the great majority of
veterinary caseload in regular clinical practice.
They
believe there is a specific market for using PAR081 in cats as they are
particularly susceptible to hypersensitivity from commonly used excipients such
as benzyl alcohol, which is an
anti-bacterial agent used in many sterile drugs including the currently
available veterinary propofol products.
Supply of the
human propofol market has been impacted by highly publicized product outages in
recent years due to FDA product recalls and citations of manufacturing
facilities for particulate contamination. This has resulted in lengthy product shortages in the hospital system
and culminated in the withdrawal of one of the three main suppliers from the
market. The formulation they intend to develop for veterinary use may have a
simple transition to human use which could dramatically enhance the market
opportunity for PAR081.
If
approved, PAR081 will compete primarily with incumbent lipid emulsion forms of
propofol, with or
without preservative, and secondarily with other products in the category. PAR081
will offer veterinarians the desirable anesthetic attributes of propofol but
will not possess the shortcomings of currently used lipid-based propofol
products.
They are
developing PAR101 to treat laminitis, an inflammation of the hoof wall
characterized by pain and loss of mobility in horses. Laminitis is a common, debilitating and progressive
disease that has resulted in highly publicized fatalities in elite racing
horses. It also causes temporary or permanent loss of function in sport,
working and pleasure horses with repeat bouts resulting in euthanasia. Currently,
there are no effective therapies to prevent or reverse laminitis, but rather
there is a focus on symptomatic treatments, diet restrictions and exercise.
The disease
description; equine metabolic syndrome, or
PAR121 is
expected to substantially speed the healing of bone post-fracture and
post-orthopedic surgery in dogs, cats and horses.
They
believe PAR122 could provide a first-in-class product to address the
destructive cycle of pruritic skin disease in dogs.
Company's
Unique Risks
They have
incurred a loss in their most recent fiscal year and for the nine months ended
March 31, 2014. If they do
not increase their revenues, they will continue to incur losses and may be
reliant upon external capital in order to continue to fund their operations.
Failure to obtain this necessary capital when needed on acceptable terms, or at
all, could force them to delay, limit, reduce or terminate their product
development, other operations or commercialization efforts.
Sales of
their existing reproductive hormones and osteoarthritis, or OA, products may
decline as a result of increased competition and other market factors. Over 50% of their revenues in fiscal year 2013 and
for the nine months ended March 31, 2014 were derived from sales of their
reproductive hormones products in markets outside the
Zydax,
their most advanced product candidate, may take longer to, or may never,
receive regulatory approval in the
They
previously entered into a Distribution and Supply Agreement with Elanco, a
division of Eli Lilly and Company, in relation to their osteoarthritis product
Zydax for dogs. Elanco has
requested that they allow them to terminate the contract due to non-specified
internal reasons. They are currently negotiating with Elanco as to how to
terminate this agreement and in particular what the consequence will be in
relation to the $2.0 million establishment fee that Elanco paid to them at the
time of entering into the agreement and any potential delay damage
payments. Failure to negotiate a satisfactory termination of the agreement with
Elanco could potentially result in them having to repay the establishment fees
received and/or certain damage payments.
While they
currently have an agreement with Elanco to market Zydax for the treatment of OA
in dogs in all countries outside
They have
not yet signed a long-term supply agreement with Lonza for the manufacture and
supply of the API contained in Zydax. Their failure to secure a long-term supply agreement may negatively
impact their ability to supply Zydax to currently approved markets and to
timely launch Zydax into new markets, which may result in a material adverse
effect upon their ability to timely grow their business.
Multiple
other companies are developing new product offerings to treat OA in dogs.
The OA
treatment market in horses is prone to competition from unapproved products
that are manufactured and sold by compounding chemists, over whom the FDA has
limited jurisdiction. Because of
the attractiveness of the large U.S. market, multiple “grey market drugs” have
emerged and are supplied either by compounding chemists under state-based
licensing laws or as a medical device which are supposed to only be used as a
post-surgical lavage. However, there is often limited or no enforcement by the
relevant regulators (e.g., the state pharmacy boards) and the FDA currently has
limited jurisdiction over this grey market. The result is that these product
offerings do not need to demonstrate safety or efficacy and hence do not need
to undertake the expensive studies with the high burden of proof that are
required by the FDA. Similarly, the manufacturing processes and quality
levels do not need to conform to the rigorous standards of the FDA. Despite
these risks, many participants in the equine industry will choose a product
based on price alone and thus competition for FDA-approved drugs can be
difficult.
Some of
their products are hormones, and their use may be seen as controversial. Their reproductive hormones are exact replicas of
naturally occurring peptides or analogues of naturally occurring prostaglandins
and maybe commonly referred to as hormones. There is an increased public
sensitivity around the use of growth promoting hormones in production animals
and increasingly foods may be labeled as “hormone free.” While their products
are not growth promoting, have an extremely short half-life and have been shown
to have no residue in meat or milk, the public may nevertheless react to the
use of their products and other products in the same class of drugs and apply
market pressure to diminish or reduce the use of their products in dairy or
beef cows
They have
limited patent protection for their products. While they have applied for and intend to continue
applying for patents, their patent applications may never be granted or, if
granted, may be reduced beyond their current expectations, which could result
in no, or reduced intellectual property protections which could expose them to
increased competition and materially impact their business, financial condition
and results of operations.
Their
manufacturing facility is regulated by multiple governmental bodies including
the FDA, the APVMA and Health
Their
directors and certain significant shareholders will exercise significant
control over them. After this offering, their directors
and significant shareholders, including Alan Bell, Robert Joseph and Brad
McCarthy, will collectively control approximately 55.1% of their outstanding
ordinary shares. As a
result, these shareholders will be able to influence their management and
affairs and all matters requiring shareholder approval in ways that may not
align with your interest as a shareholder,
Bottom Line
Their
revenues were $5.29 million and $9.54 million and their net income (loss) was
$67 thousand and ($3.48 million) in 2012 and 2013, respectively. For the nine
months ending March 31, 2014, their revenues decreased $0.5 million to $4.30
million due to delayed supply of the API for Zydax resulting in an out-of-stock
situation for seven of the nine months reported. In April 2014, they have
returned to market with API provided by a new supplier and have had a successful
uptake of the inventory they now have on hand
They are a
fully integrated pharmaceutical company focused on developing, manufacturing
and commercializing innovative animal health solutions. They currently market
five products for companion animals and production animals in 14 countries and
augment their pharmaceutical products with their proprietary iKAM and mySYNCH®
software platforms. Their lead reproductive hormone products, estroPLAN® and
GONAbreed®, are designed to safely and effectively improve cattle breeding
performance and are currently marketed in 12 countries. They were the first
company to achieve FDA approval for the indication of estrous synchronization
in lactating dairy and beef cows. Their disease-modifying product, Zydax®, for
the treatment of osteoarthritis, or OA, in dogs and horses, stimulates the
growth of new cartilage and inhibits cartilage breakdown. Zydax has an
excellent efficacy and safety profile, with one million doses sold, and has led
to improved quality of life for dogs and improved performance of sport horses.
They have marketed Zydax in
The companion
animal products market is growing due to increasing pet ownership; growing
disposable incomes, particularly in emerging markets; increasing medical needs
of companion animals as they live longer and the growing emphasis on the
development of new medical therapies specifically for pets. The anesthesia
market is approximately $60 million in annual revenue, and the European market
is estimated to be similar in size. The use of propofol in veterinary
anesthesia is less than its potential because the current propofol products
have shortcomings.
The
production animal health industry is primarily focused on providing vaccines
and pharmaceuticals and is growing in response to increasing food demands from
a growing global population. Livestock owners are always looking for ways to
improve production efficiency through the use of new, innovative, animal health
products. Efficiently re-establishing pregnancy across the entire milking herd
has long been, and remains, a pivotal economic driver in commercial dairying
with nearly all modern dairy herds bred by artificial insemination. There are approximately 9.2 million dairy
cows in the
They are
developing PAR121 to bring novel advantages to the management of bone injury in
dogs and horses. Approximately $1.5 billion is annually spent on managing knee
injuries in dogs, including surgery. Ultimately, any opportunity to enhance the
recovery process from fractures or orthopedic surgeries would not only benefit
the dog’s quality of life but would greatly reduce the owner’s frustrations of
caring for a dog post-surgery. There are estimated to be 9.2 million horses in
the
They plan to
capture additional market share of reproductive hormones in the
They believe
that injection is the appropriate means of providing progesterone priming and
that insertion of intravaginal retained devices for seven days is impractical,
uneconomic and has inferior animal welfare outcomes. They believe that
GONADOPRO provides improved pregnancy outcomes with substantially less time,
labor and risk of error. The low dose of P4 delivered in a GONADOPRO injection
and its rapid metabolism indicate a likely safe meat and milk residue profile,
making it likely that there will be little to no impact on human food chain safety.
They believe
a particular opportunity exists for using PAR081 in procedures requiring up to
one hour of anesthesia or deep sedation, which comprise the great majority of
veterinary caseload in regular clinical practice. They believe there is a
specific market for using PAR081 in cats as they are particularly susceptible
to hypersensitivity from commonly used excipients such as benzyl alcohol. They
believe the propofol formulation they intend to develop for veterinary use may
have a simple transition to human use which could dramatically enhance the
market opportunity for PAR081. PAR081 will offer veterinarians the desirable
anesthetic attributes of propofol but will not possess the shortcomings of
currently used lipid-based propofol products.
They are
developing PAR101 to treat laminitis, an inflammation of the hoof wall
characterized by pain and loss of mobility in horses. Currently, there are no
effective therapies to prevent or reverse laminitis, but rather there is a
focus on symptomatic treatments, diet restrictions and exercise. Increasing
awareness of EMS and its risk factors and consequences will build market demand
for a solution to laminitis caused by
They have
incurred a loss in their most recent fiscal year and for the nine months ended
March 31, 2014. Sales of their existing reproductive hormones and
osteoarthritis, or OA, products may decline as a result of increased
competition and other market factors. Their reproductive hormone products have
minimal patent protection, and therefore are susceptible to significant pricing
and competitive pressures. Zydax, their most advanced product candidate, may
take longer to, or may never, receive regulatory approval in the
They are
currently negotiating with Elanco as to how to terminate their distribution and
supply agreement with them and in particular what the consequence will be in
relation to the $2.0 million establishment fee that Elanco paid to them at the
time of entering into the agreement. While they currently have an agreement
with Elanco to market Zydax for the treatment of OA in dogs in all countries
outside
Multiple
other companies are developing new product offerings to treat OA in dogs. The
OA treatment market in horses is prone to competition from unapproved products
that are manufactured and sold by compounding chemists, over whom the FDA has
limited jurisdiction. Despite the risks, many participants in the equine
industry will choose a product based on price alone and thus competition for
FDA-approved drugs can be difficult. Some of their products are hormones, and
their use may be seen as controversial. The public may nevertheless react to
the use of their products and other products in the same class of drugs and
apply market pressure to diminish or reduce the use of their products in dairy
or beef cows. They have limited patent protection for their products. Their
manufacturing facility is regulated by multiple governmental bodies including
the FDA, the APVMA and Health