MiddleBrook Pharmaceuticals, Inc.
(NDAQ: MBRK) shares continue to surge today after the company said
earlier this month that it hired Morgan Stanley to explore strategic
alternatives, including a possible sale of the company. A recent FDA
approval in January helped triple the company’s market value while an
analyst commented that the company could look at a premium of 30
percent in case of a potential sale. Many other investors believe that
the company could see an even higher premium given its novel Pulsys
technology that would also be acquired. So, is MBRK a stock worth
adding to your portfolio?
MiddleBrook received approval for its New Drug Application (NDA)
from the U.S. Food and Drug Administration (FDA) for its one-daily
Moxatag Tablets 775mg for the treatment of adults and pediatric
patients 12 years and older with pharyngitis and/or tonsillitis
secondary to Streptococcus pyogenes. According to the company, the
approval was based on the company’s Phase 3 clinical study of more than
600 adults and pediatric patients 12 years and older in a double-blind,
double-dummy, randomized, parallel-group, 50-center non-inferiority
trial. News of this approval jumped shares from around $1.50 to over $3
the next day.
“We are extremely gratified to have received FDA approval of our
MOXATAG NDA,” stated Edward Rudnic, Ph.D., president and CEO of
MiddleBrook. “As the first and only once-daily amoxicillin therapy
approved for marketing in the United States, we believe MOXATAG
represents a major advance for patients and doctors seeking safe,
effective, and convenient treatment options for strep throat. We now
look forward to continuing our ongoing strategic evaluation process
from a position of greater strength with this approval in hand.”
The approval brings to market the first major product that
illustrates MiddleBrook’s PULSYS technology. This technology is
essentially a change in the dosing paradigm that allows for more
effective treatments that only have to be taken once daily. PULSYS
exposes bacteria to rapid antibiotic pulses within the first hours of
initial dosing, which appears to cripple bacteria’s natural defense
mechanisms and eliminate them more efficiently and efectively than
traditional infectious disease therapy regiments. MiddleBrook is one of
the only high-tech companies focused on the antibiotics sector and
seeks to redefine infectious disease therapy with this process. And it
seems to be working in this latest drug release.
“Compared to four times daily penicillin, once-daily MOXATAG has
shown comparable efficacy and tolerability in eradicating Group A
streptococcal infections of the pharynx. However, the once-daily dosing
of MOXATAG is a major advantage,” said lead study investigator Stan L.
Block, M.D., professor of clinical pediatrics at the Universities of
Louisville and Kentucky Medical Schools. “For the first time,
physicians in the U.S. have the option of an FDA-approved once-daily
amoxicillin therapy to treat their adolescent and adult patients with
pharyngitis/tonsillitis. This should ensure better first- line therapy
compliance with a penicillin class of antibiotic.”
In the end, all startup biopharmaceutical companies are risky
ventures as they have no revenues and high R&D overhead. That said,
MiddleBrook recently received an NDA and go-ahead from the FDA and was
even able to raise an additional $21 million through a stock offering.
This means that they should have a product to market within the next
year while other investors are showing enough confidence to capitalize
the company and keep it alive until it becomes profitable. However, given the steep rise in recent days, we could see a pullback before any more substantial gains. Combined,
these factors make MBRK a stock worth watching in 2008!
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