Company Spotlight - XenoPort Inc. (XNPT-NASDAQ) High Flying Adored | | NYSE: XNPT $60.72 | The Good: One drug represents multi-billion opportunity.
The Bad: Earnings may or may not happen.
The Beautiful: R & D keeps announcing good news. | P/E: n/a | PSR: 51 | ROE: n/a | Debt/Eq: 0.0 | BETA: 1.81 |
January 23, 2008 - XenoPort Inc. (XNPT-NASDAQ) is working to improve drugs' bioavailability, or their ability to be absorbed by tissues in the body. The development-stage firm is using genomics to identify transporter proteins. It then designs oral drug molecules to find and ride these transporters through the gastrointestinal tract to their destination. Xenoport has four drug candidates in clinical trials with more in preclinical development. All are based on existing drugs with the aim of improving their effectiveness, reducing side effects, and requiring less frequent dosings.
There's one drug, designated XP 512, that could turn into a multi-billion dollar blockbuster. It's being developed in partnership with GlaxoSmithKline and treats restless leg syndrome (RLS) and neuropathic pain. Data on the Phase III studies for RLS are in progress and will be released soon. If positive, Glaxo will file for FDA approval in the latter half of this year.The drug may have additional benefits. Clinical trials are ongoing to test for its efficacy for other neurological disorders such as diabetic neuropathy, post-herpetic neuralgia, and migraine prophylaxis. It's also being studied for its benefits on sleep. Other compounds are in the pipeline, being tested. XP 986 has 2 mid-stage clinical trials, one for gastro-esophageal reflux disease and spasticity related to spinal cord injury. Look for data from these studies in the second half of this year. Another compound XP 279, an off-shoot of L-dopa, a treatment for Parkinson's disease, will have data released in the first quarter. One more compound, XP 510, was recently the foundation for a licensing deal with Xanodyne Pharmaceuticals for its development as a preclinical, non-hormonal compound as therapy for menorrhagia or excessive menstrual bleeding. Some numbers: Earnings were negative in 2005 and 2006, expected to be 90 cents positive for 2007 but return to the red in 2008 for minus 25 cents a share. By 2010 through 2012, analysts are looking for $1.75 eps. The company went public in 2005 with 24.991 million shares. Market cap is $1.5 billion. Revenues should be $110 million this year and $90 million next. Book Value is $4.50 a share. This is a typical early stage pharmaceutical company. There's plenty of hope and high expectations with little in revenues or profits. But that could change in a few months, if, and it's always, always, always a big if, the FDA approves XP 512 for RLS. Then revenues may be in the billions and the profits will flow. Then again, they may not. - Company Web site: www.xenoport.com - Ted Allrich
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