Initiating Coverage on the Most Compelling Drug Reformulation Story of 2015

April 09, 2015


One Equity Research is initiating coverage on Lightlake Therapeutics (OTCQB: LLTP) as the most compelling risk-adjusted drug reformulation story of 2015. See our full report for details.

The Billion Dollar Healthcare Epidemic

The leading cause of drug-related death is opioid overdose, a market opportunity estimated at $1B+ per annum. Overdose is effectively reversed with an opioid antagonist called naloxone, but its availability as an injection severely limits its actual societal benefit. Subcutaneous naloxone is not indicated for use by lay persons and immediate access at the site of an overdose is often the difference between life and death. This explains why the Obama Administration, the FDA, and NIH are calling for safer and more effective alternatives.

Source: CDC

Reformulated Nasal Naloxone Could Provide Solution to Epidemic; Upside for Lightlake Therapeutics

Lightlake is expected to report the results of its pivotal study of intranasal (nasal spray) naloxone for immediate reversal of opioid overdose this quarter, which will support a NDA filing and potential FDA approval in calendar 2015. We believe Lightlake could mirror reformulation stories like Cynapsus' (OTCQX: CYNAF) APL-130277, an oral formulation of apomorphine indicated for off-episodes associated with Parkinson's disease, or Tonix's (NASDAQ: TNXP) TNX-201, an oral formulation of (R)-isometheptene mucate, indicated for episodic tension-type headache.

We believe that as investor visibility increases, Lightlake will be rewarded for value-creating milestones, for example their commercial partnership with Adapt Pharma, which provides for milestones payments of over $55 Million and double-digit tiered royalties on worldwide sales. Adapt was founded by a group of former Elan Pharma executives who previously founded Azur Pharma, which merged with Jazz Pharmaceuticals (NASDAQ: JAZZ) in a deal [then] worth $500M (and now valued at upwards of $2 Billion).

Lightlake is valued at just $13 Million, compared to valuations north of $100 Million for Cynapsus and Tonix, who are in similar stages of development and potentially address equally large market opportunities. We believe fair value for Lightlake shares is $12-13, compared to recent prices ~$7. Further, we believe that with execution, Lightlake could be worth upwards of $25/share as the Company sees accretion from commercial launch of nasal naloxone in opioid overdose and advances additional clinical assets, notably for binge eating disorder, bulimia, and other unmet diseases.

Near-Term Catalysts Provide Reason for Investors to Own Lightlake Now

We believe that Lightlake will see at least 5 major catalysts and give investors a reason to own shares of the Company throughout 2015. In addition to (i) pivotal study data and subsequent NDA filing expected this quarter, potential (ii) FDA approval of nasal naloxone for opioid overdose in 2H 2015 may (iii) come sooner than expected as privately-held kaléo, Inc. set precedent with its auto-injector for opioid overdose being approved at least 3 months ahead of an already fast-tracked PDUFA date and (iv) commercial launch by partner Adapt Pharma may closely follow regulatory approval of the product. Importantly, Lightlake may at any point this year announce a study to advance one or more of its pipeline candidates - all of which address billion dollar unmet needs.

We see Antares Pharma (NASDAQ: ATRS) as a compass for where Lightlake may eventually be with global commercialization partner(s) - like Adapt Pharma - and a portfolio of better-delivered therapeutics for large unmet needs.

To better understand why we believe investors could see 80%+ in near-term upside by owning LLTP, click here to view our FULL INITIATION REPORT on Lightlake Therapeutics.

About One Equity Research

One Equity Research is a leading provider of proprietary and in-depth research crafted by respected financial analysts and domain experts. Our team includes trained finance professionals with diverse backgrounds that include equity research, investment banking, and strategic consulting at preeminent firms. We distribute our research through mainstream media partners and to subscribers of our Intelligence Service. To learn more please visit http://www.oneequityresearch.com/

Legal Disclaimer: This research note has been prepared by One Equity Research, LLC on behalf of Lightlake Therapeutics as part of research coverage services. We have received and continue to expect to receive twenty thousand dollars per month for these services. In addition we have received ten thousand restricted shares of Lightlake Therapeutics and may receive an additional forty thousand restricted shares in the future. This research note is not an offer or solicitation to buy or sell the securities of Integral Technologies. The report is for information purposes only, and is not intended to (and is provided explicitly on the condition that it not) be used as the sole basis to make any investment decision. Investors should make their own determinations whether an investment in any particular security is consistent with their investment objectives, risk tolerance, and financial situation.

News & Analysis