3 Things to Watch With Antares Pharma

Who likes needles? Many of us cringe just thinking about a long needle poking into our skin. Antares Pharma (Nasdaq: ATRS  ) is counting on lots of those cringing needle-phobes wanting an alternative. The company focuses on pressure-assisted and needle-free self-injection products and topical gels that administer medications.

Can an investment in Antares give a needle-free shot in the arm to your portfolio? Here are three things to watch with this potential rising star.

1. Good vibes for Vibex
One key to Antares' success is Vibex MTX. The product uses a parenteral drug delivery system to administer methotrexate, a drug prescribed for around 70% of rheumatoid arthritis patients.

Tests for Vibex MTX have gone well, according to the company. Antares anticipates submitting an NDA in early 2013. Assuming Vibex MTX gains regulatory approval, Antares will commercialize Vibex MTX on its own except for Canada, where the product will be marketed by Uman Pharma.

The company also has development under way for using the Vibex technology in administering testosterone replacement therapy. For now, though, the primary focus is on Vibex MTX. If the Antares gains FDA approval and is able to execute well on commercialization, this is the product that could possibly catapult the company to the next level.

2. Good prospects for partners
In the meantime, Antares depends on sales generated by its partners. Strong sales for partners means good news for the company.

In 2011, half of the company's revenue stemmed from Teva Pharmaceuticals (NYSE: TEVA  ) . Teva markets a human growth hormone injection using Antares' technology and has filed an ANDA to market an epinephrine self-injector using Vibex.

Another 35% of Antares' revenue comes from Ferring Pharmaceuticals BV. Ferring markets its human growth hormone using Antares' needle-free injector under the Zomajet brands. 

Watson Pharmaceuticals (NYSE: WPI  ) began marketing Antares' oxybutynin gel used in treating overactive bladders earlier this year. The licensing agreement with Watson provided a nice bump for Antares' third quarter revenue.

One partnership cloaked in a bit of mystery is Antares' deal with Pfizer  (NYSE: PFE  ) . The company licensed "one of its drug delivery technologies" to Pfizer's Consumer Healthcare Business Unit to "develop an undisclosed product on an exclusive basis for North America" at the end of 2011. Few details are available at this point, although Antares received a $750,000 milestone payment from Pfizer in 2012. 

Antares also wins if its partner BioSante (Nasdaq: BPAX  ) manages to pull off a major comeback with its LibiGel testosterone gel for female sexual dysfunction. BioSante's earlier phase 3 studies didn't find significant improvement compared with placebo. However, the company continues to plow ahead. Should it ultimately prevail in getting LibiGel to market, Antares would receive royalty payments from any sales.

3. Good trends for the future
Perhaps the most important thing to watch over the long run is whether Antares capitalizes on several trends that the company believes are in its favor.

One of these trends is the growth of biosimilar products. Antares hopes to position its technology as a good alternative for pharmaceutical companies that want to differentiate their products from biosimilars by making self-administration convenient and easy.

The company also points to the general increase in drugs that must be taken via injection. Enabling more of these drugs to be self-injected rather than requiring patients to visit a medical professional should help control health-care costs. Antares thinks it could benefit by making these self-injections more user-friendly. 

Skin in the game?
Investors who bought Antares earlier in the year are probably happy with their decision. Shares are up 70% year to date. That gain comes even with a recent secondary offering that diluted shares around 10%.

Is Antares still at a good point for others who want to put some skin in the game?  Even assuming the FDA grants approval for Vibex MTX, it will be a while before the product reaches the market. Much could change between now and then.

On the other hand, Antares boasts several strong partnerships that should generate even more revenue going forward. The long-term trends just might prove to be the catalysts the company hopes they will be. It's definitely a risk, but Antares looks to be a stock in which risk-taking investors should consider taking a shot. 

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