ACE Investors

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By Team Ace Investors

Company Overview

LTP Pharma Limited (LTR) is a drug development, research, and repurposing company, focused on men’s health. The company is currently commercializing a 'first-in-class' rapid onset, on-demand therapeutic nasal spray product SPONTAN® for the treatment of erectile dysfunction (ED). LTP is currently focused on changing the method of administration of an existing and approved drug for the treatment of ED called Vardenafil. Vardenafil has already been approved by the FDA for over 20 years and is also approved for use in Australia by the TGA. LTP’s nasal spray product is changing the route of administration of Vardenafil from an oral delivery to an intranasal delivery. By strategically focusing on changing the method of administration of an existing approved drug, LTP expects to have a reduction in time, cost, and risk associated with the regulatory pathway for approvals. LTP is preparing to launch SPONTAN®, which is based on an intranasal Vardenafil formulation, SDS-089, by undertaking a bioequivalence trial. The Company plans to meet with and make applications to, the FDA and TGA post its bioequivalence trial to seek an expedited approval process to sell and market SPONTAN® in the United States and Australia. The Company may also explore alternative avenues to make SPONTAN® available to patients where necessary before it receives regulatory approval from the TGA or FDA. The Company recently raised A$7m with the issuance of 35 million shares at an issue price of $0.20 per share. The proceeds from the raise will be used to advance SPONTAN on its accelerated commercial pathway to market, including a bioequivalence study and anticipated expedited regulatory filings in Australia and the United States within 1-2 years.

Investment Rationale:

Adopted an accelerated pathway to commercialization

LTP has adopted an accelerated pathway to commercialization. LTP is focused on changing the method of administration of an existing and approved drug that is already on the market for the treatment of ED called Vardenafil, also known by the brand names Levitra® and Staxyn®. The Company’s lead product SPONTAN differs from existing ED therapies by its mechanism of action – intranasal delivery of an already proven, effective, and regulatory-cleared PDE5 inhibitor. Its unique composition and delivery mechanism are designed to bypass first-pass metabolism associated with many oral PDE5 medications. By strategically focusing on the repurposing of and changing the method of administration of an existing approved drug used for the treatment of ED (Vardenafil), LTP expects to have a reduction in time, cost, and risk associated with the regulatory pathway for approvals. LTP’s nasal spray product SPONTAN® utilizes an already approved drug, Vardenafil, for the treatment of ED which has been approved by the FDA for over 20 years and is also approved for use in Australia by the TGA. As such, LTP anticipates that it will have an expedited pathway to revenue. Changing the route of administration of Vardenafil from an oral delivery to an intranasal delivery offers advantages over the traditional method-

The large existing market opportunity for ED medications;
The growth in the prevalence of ED is primarily caused by growth in aged cohorts, with ED prevalence increasing with age;
Side effects of existing products;
The increased concern of ingesting compounds, with lack of therapeutic benefits for a large cohort of patients; and decreased regulatory burden and costs through the anticipated 505(b)(2) submission pathway for the FDA, and Type F application for the TGA.

Pursuing the expedited FDA 505(b)(2) regulatory process

LTP is targeting a large addressable market in ED. The global market for ED treatments was estimated to be worth US$3.6 billion in 2021 and is expected to grow to US$5.9 billion by the end of 2028. The company has adopted accelerated pathways to commercialization under the change of route to administration for an already approved drug. The Company’s key focus is to commercialize and sell SPONTAN® globally.

LTP’s current growth plan for SPONTAN® includes commercializing sales in Australia following TGA approval and commercializing sales in the United States following FDA approval, and then globally. LTR Pharma is planning to pursue the expedited FDA 505(b)(2) regulatory process, which governs a change of route in the administration of an already approved drug. The Company received approval from the Bellberry Human Research Ethics Committee (“HREC”) for a bioequivalence clinical trial comparing its proprietary multi-use Nasal Spray SPONTAN with the FDA-approved ED drug Levitra®. The trial will compare the pharmacokinetics, safety, and tolerability of Vardenafil following the administration of SPONTAN and Levitra® tablets in healthy male adults. Patient recruitment is expected early next year, with trial sites to open in Sydney, Australia in Q1 CY24.
In addition, the Company intends to develop a range of new nasal spray products both for the treatment of ED and new indications by investing in product research and development into different concentrations/dosages of SPONTAN® to address market needs; and additional nasal spray products using other approved PDE5 Inhibitors to create a range of nasal spray products for the treatment of ED and non-ED conditions.
Further, the Company will seek to enter into sub-licensing arrangements with third parties allowing them to manufacture and/or sell SPONTAN® in any jurisdiction in which the Company does not intend to directly operate in.

LTP completed SPONTAN® pivotal clinical study recruitment and dosing

On 25 Mar’2023, the company announced that all patients recruited for its pivotal bioequivalence clinical study of SPONTAN® nasal spray ("the Study") had received their second and final dose. The Study is a critical milestone and will expedite the path to commercialization. Data collected from the Study will used to support the pre-submission meetings with the FDA and prescriptions of SPONTAN via the early access scheme in Australia. The Study evaluated the relative bioavailability of SPONTAN, a novel and proprietary PDE5 (Vardenafil) nasal spray treatment for ED. The company believes SPONTAN represents a large paradigm shift in the treatment for Erectile Dysfunction and is a disruptor to the global blockbuster PDE5 (Viagra, etc) market. With recruitment and dosing now complete, the Study progresses to the data evaluation phase, with data read-out expected in mid-2024.

ACE's Recommendation:

LTP has adopted an accelerated pathway to commercialization. LTP is focused on changing the method of administration of an existing and approved drug that is already on the market for the treatment of ED called Vardenafil, also known by the brand names Levitra® and Staxyn®. The Company’s lead product SPONTAN differs from existing ED therapies by its mechanism of action – intranasal delivery of an already proven, effective, and regulatory-cleared PDE5 inhibitor. Its unique composition and delivery mechanism are designed to bypass first-pass metabolism associated with many oral PDE5 medications. By strategically focusing on the repurposing of and changing the method of administration of an existing approved drug used for the treatment of ED (Vardenafil), LTP expects to have a reduction in time, cost, and risk associated with the regulatory pathway for approvals. LTP’s nasal spray product SPONTAN® utilizes an already approved drug, Vardenafil, for the treatment of ED which has been approved by the FDA for over 20 years and is also approved for use in Australia by the TGA. As such, LTP anticipates that it will have an expedited pathway to revenue. The company recently announced that all patients recruited for its pivotal bioequivalence clinical study of SPONTAN® nasal spray have received their final dose and the company is now evaluating data received from the study with data read-out expected in mid-2024. We believe that data read-out in mid-2024 will be a key near-term catalyst for growth. The stock closed the day at A$0.285/share today and offers huge upside potential. So, we would like to recommend a SPECULATIVE BUY rating on the stock.

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