Agile Therapeutics, Inc. (Nasdaq: AGRX) is a forward-thinking women’s healthcare company dedicated to fulfilling the unmet health needs of today’s women. The company’ product candidates are designed to provide women with contraceptive options that offer freedom from taking a daily pill, without committing to a longer-acting method.
The company’ shares continue to zoom backed by the favorable impact of its recent announcements, and after it announced the completion of Formal Dispute Resolution Process with the FDA. Furthermore, from liquidity and financial standpoint, the Company believes its cash and cash equivalents as of June 30, 2018, will be sufficient to meet its operating requirements into the second quarter of 2019.
Oct. 09, 2018, the company announced that it had received a response from FDA’s Office of New Drugs (“OND”) concerning the Company’s formal dispute resolution request. The Company had appealed the decision by the FDA’s Division of Bone, Reproductive and Urological Products (“DBRUP”) that concerns surrounding the in vivo adhesion properties of Twirla prevent its approval. While OND has formally denied the Company’s appeal, OND provided a path forward without the need to reformulate Twirla or conduct a bioequivalence study between formulations, as previously suggested by DBRUP.
“We appreciate the constructive discussions we’ve had with the FDA during this formal dispute resolution process. We are pleased that OND has provided a path forward, and we plan to meet with the Division to discuss the specifics of the proposed wear study as soon as possible. We look forward to resubmitting the NDA for Twirla after completion of our wear trial and welcome the opportunity to discuss the potential safety and efficacy of Twirla at an Advisory Committee Meeting,” said Al Altomari, Chairman and Chief Executive Officer of Agile Therapeutics, Inc. Mr. Altomari continued, “After we agree on the parameters of the wear study, we anticipate providing a further business update, which will review our cash guidance and planned resubmission timeline.”
Fine prints of OND decision:
- OND suggested that the Company conduct a wear study to evaluate whether Twirla demonstrates a generally similar adhesion performance to Xulane®, the generic version of the previously marketed Ortho Evra®contraceptive patch, a product the FDA considers to have acceptable adhesion.
- If this result is demonstrated, OND stated that the study would support the conclusion of adequate Twirla adhesion.
- OND has recommended that the Company first meet with DBRUP to gain agreement on the specific design and success criteria of a wear study for Twirla.
- Generally, wear studies are conducted by generic companies during the Phase 1 development of transdermal products and are significantly smaller in scope and shorter in duration than typical Phase 3 contraceptive clinical trials.
- The wear study suggested by OND provides a path forward but does not address efficacy. Rather, if the wear study is successful, Twirla’s safety and efficacy, including the Pearl Index, will need to be reviewed by FDA after the Company resubmits the NDA for Twirla. This is an issue that DBRUP plans to bring to the Advisory Committee after the adhesion issue has been resolved.
Notwithstanding this temporary setback, analysts tracking the stock believes that the company business profile is marked by significant revenue potential & the company’ strong fundamentals are well poised for value creation. Per www.marketbeat.com, Their average twelve-month price target is $4.00, suggesting that the stock has a possible upside of 318.76%. The high price target for AGRX is $5.00, and the low-price target for AGRX is $3.00. There are currently two hold ratings, and four buy ratings for the stock, resulting in a consensus rating of “Buy.” Considering all this, the company is in a favorable risk-reward position, and value investors should consider exposure in this sector as the backdrop remains favorable.
Below are the excerpts of recent analyst rating on the script:
As per marketbeat.com
About Twirla: The company’ lead product candidate, Twirla® (levonorgestrel/ethinyl estradiol transdermal system) or AG200-15, is an investigational low-dose, non-daily, prescription contraceptive. Twirla is based on the company’ proprietary transdermal patch technology, called Skinfusion®, which is designed to allow drug delivery through the skin.
In addition to Twirla, the company is also developing a pipeline of other new transdermal contraceptive products, including:
- AG200-SP, a regimen designed to allow women to experience shorter, lighter periods
- AG200-ER, a regimen designed to allow a woman to extend the length of her cycle
- AG200-ER (SmP), a regimen designed to allow a woman to extend the length of her cycle and experience shorter, lighter periods
- AG890, a progestin-only contraceptive patch intended for use by women who are unable or unwilling to take estrogen
Second Quarter 2018 Highlights:
- Cash and cash equivalents: As of June 30, 2018, Agile had $22.5 million of cash and cash equivalents compared to $35.9 million of cash and cash equivalents as of December 31, 2017. In June 2018, the Company announced a reduction in its workforce and reductions on other planned operating expenses as the Company pursues formal dispute resolution. As a result of these planned cost reductions, the Company believes its cash and cash equivalents as of June 30, 2018, will be sufficient to meet its operating requirements into the second quarter of 2019.
- The Company will require additional capital to fund operating needs for the remainder of the second quarter of 2019 and beyond, including among other items, the completion of its commercial plan for Twirla, which primarily includes validation of the commercial manufacturing process and the commercial launch of Twirla, if approved, and advancing the development of its other potential product candidates.
- Research and development (R&D) expenses: R&D expenses were $2.4 million for the quarter ended June 30, 2018, compared to $3.8 million for the comparable period in 2017. The decrease in R&D expenses was primarily due to decreased clinical development expenses as the Company’s Phase 3 SECURE clinical trial for Twirla completed the close-out phase during 2017 as well as decreased regulatory expenses related to the preparation of the Company’s NDA resubmission and response to the FDA’s February 2013 CRL in June 2017.
- General and administrative (G&A) expenses: G&A expenses were $2.3 million for the quarter ended June 30, 2018, compared to $3.2 million for the comparable period in 2017. The decrease in G&A expenses was primarily due to the suspension of pre-commercialization activities as a result of the receipt of the CRL in December 2017.
- Net loss: Net loss was $5.3 million, or $0.16 per share for the quarter ended June 30, 2018, compared to a net loss of $7.4 million, or $0.26 per share for the quarter ended June 30, 2017.
Key risk factors and potential stock drivers:
- Successful completion of the upcoming milestones would lead future direction for the company.
- The near to medium term performance of the company is largely dependent on the success of Twirla. Therefore, any adversities about the same might adversely impact the overall investor sentiments.
- The company operation is still in the clinical development stage. Therefore, its ability to maintain its present strong liquidity and financial flexibility and to fund its incremental capital requirements without any significant cost or time overruns would remain a critical challenge for the company.
- AGRX operates in a highly competitive and dynamic space and only time would differentiate between real winners and laggards. Some of its competitors may have longer operating histories and greater resources than AGRX.
- As far as choosing an option with a relative advantage is concerned, AGRX is a preferred choice with upside potential.
- On Friday, Oct 19th, 2018, AGRX closed at $0.9552, with an average volume of 5.56 million shares exchanging hands. Market capitalization is $32.837 million. The current RSI is 69.52
- In the past 52 weeks, shares of AGRX have traded as low as $0.2310 and as high as $5.3300
- At $0.9952, shares of AGRX are trading above its 50-day moving average (MA) at $0.42 and above its 200-day moving average (MA) at $1.69
- The present support and resistance levels for the stock are at $0.73 & $1.09 respectively.