Thursday, February 28, 2013

ADVENTRX Pharmaceuticals (ANX) to Mast Therapeutics (MSTX)

I wrote about ADVENTRX Pharmaceuticals (ANX) in November 2011 when they first caught my attention.  They were having problems getting traction with their main drug offering, ANX-530, but they seem to have pushed it to the back burner.  That's not the only major change they've undertaken.  They are completely changing their name and ticker symbol to Mast Therapeutics (MSTX) in March 2013.  I'm not sure what prompted this change, but other changes since my first article are noticeable.

Their remaining drugs, ANX-188 and ANX-514, are still around.  They have managed their cash burn very well but will need more than the $26M in cash they had on hand last September to get ANX-188 through the two years of a Phase 3 trial.  It's a treatment for sickle-cell vaso-occlusive crises; the Mayo Clinic notes that hydroxyurea is the leading treatment on the market at this time.  Bristol-Myers Squibb is the maker of hydroxyurea's two brand names, Droxia and Hydrea.

The NIH determined that the cost-effectiveness of hydroxyurea (measured in hospital cost avoidance) is $5210 per patient.  This is the most relevant metric that ANX-188 must outperform if it is to gain acceptance as a prescription drug after its Phase 3 trials.  Hydroxyurea is a prescription-only drug available now in generic form, and a quick web search shows per-pill prices of US$0.55 to $1.42 depending on the pharmacy.

ANX-188 needs to be both a qualitatively superior treatment and competitively priced to have a shot at taking on hydroxyurea.  It's hospitalization cost avoidance must be greater than $5210 per patient and the dosage should cost less than a buck at retail.  This company's name change is the beginning of a new story for their drugs.  There's nothing like a clean break with the past if you want to focus on the future.  Let's see what the future holds for ANX-188.

Full disclosure:  No position in ANX / MSTX at this time.