Summary from SA article this morning:
"...
Summary
Acer is building a pharmaceutical company focused on acquiring, developing and commercializing orphan and ultra-orphan drugs to treat rare and ultra-rare diseases, taking advantage of orphan drug legislation and certain accelerated regulatory provisions in the U.S., the European Union and potentially other jurisdictions.
Acer's business plan to focus on rare diseases, taking advantage of applicable orphan drug legislation where 5 to 10-year exclusivity may be available, is potentially very lucrative as orphan and ultra-orphan drugs often generate very high profit margins and cash flow. In addition to its current pipeline, Acer's plan is to acquire at least one new orphan or ultra orphan drug each year. It has identified another 15 to 20 drugs which it may be interested in pursuing.
With a $310 million market and financed until H1 2020 (based upon its current plans), it has an experienced management team, and two advanced stage drug candidates for the U.S. market for severe genetic disorders addressing orphan diseases:
- EDSIVO™ (celiprolol) for vascular Ehlers-Danlos syndrome (“vEDS”); and
- ACER-001 (a fully taste-masked, immediate release formulation of sodium phenylbutyrate) for urea cycle disorders (“UCD”) and Maple Syrup Urine Disease (“MSUD”).
The NDA for EDSIVO is expected to be filed in Q4 2018, and if priority review is granted, EDSIVO may have a PDUFA date by Q2 2019. If approved by the FDA, it may be commercially launched beginning in Q3 2019.
There is no FDA approved drug to treat vEDS. As the vEDS population is an estimated 5,000 patients in the U.S., Acer's commercial strategy of launching with an initial 50 Centers of Excellence may generate a run rate of $50 million to $100 million in EDSIVO sales by H2 2020 (based upon an annual drug price of $100,000 to $120,000). With an estimated 100 Centers of Excellence being set up within the U.S. within 3 years, peak sales of EDSIVO have been estimated by analysts to be $350 million to $400 million per annum.
Acer's second drug candidate ACER-001 is focused on the treatment of UCD, another orphan disease. Bio-equivalence studies are expected to be completed in 2019 with an NDA filed for ACER-001 to treat UCD in late 2019, and if all goes well, approval could be obtained in the U.S. in Q4 2020 with a commercial sales launch to take place shortly thereafter.
ACER-001 expects to compete directly with Horizon's orphan drug Ravicti which currently sells for $900,000 per year (closer to $500,000 per annum after rebates and discounts). Acer currently anticipates that ACER-001 will be priced at $250,000 to $275,000 per annum, and will cannibalize Ravicti's sales. If only 300 UCD patients switch to ACER-001 that alone could generate $75 million or more in annual sales for Acer which could ramp up very quickly.
Acer plans to expand the treatment indications for ACER-001 to include MSUD (already orphan drug designated). Early clinical studies at Baylor College of Medicine, albeit in a very small patient group, suggest ACER-001's potential to treat MSUD. Subject to Acer's capital constraints, Acer hopes to file an IND for ACER-001 for the treatment of MSUD in 2019, and subject to successful clinical trials, to file an NDA for ACER-001 to treat MSUD in 2021.
Using the s. 505 regulatory pathway and the Orphan Drug Act, as well as similar orphan drug legislation in the European Union and other jurisdictions, Acer has the ability to accelerate approval of its current pipeline of orphan drugs, and to potentially ramp up lucrative revenues. With its current plans to acquire at least one new orphan or ultra orphan drug each year, Acer could develop into a very valuable company over the next few years.
Assuming approvals of EDSIVO and ACER-001, peak sales from those 2 drugs alone are potentially in excess of $400 million generating very high margins and cash flow.
Acer is undervalued, relatively de-risked and has the potential to generate substantial returns for shareholders in the next 12 to 24 months, as well as in the years to follow.
Analyst Coverage
Brookline Capital - Price target: $51.00 (as of August 20, 2018)
Raymond James - Price target: $46.00 (as of August 17, 2018)
Roth Capital - Price target: $66.00 (as of August 14, 2018)
William Blair - No price target, Strong Buy (as of August 14, 2018)
HC Wainwright - Price target: $55.00 (as of August 14, 2018)
..."