OK, this is my first article on this site. And I have some disclaimers.
I’m not an expert. I own warrants in the stock already, but I am considering purchasing some more and/or some stock.
This is more of an investment idea(2-3 mths or maybe 18mths for greater appreciation), than a long term investment based on the science itself.
I got some of this information myself and some from other sites. With that disclaimer, here goes:

Why I bought warrants of Kitov Pharmaceuticals

Kitov Pharmaceuticals: Who are they – according to their website? (http://kitovpharma.com/)
”Kitov Pharmaceuticals (NASDAQ/TASE: KTOV) is an innovative biopharmaceutical company focused on late-stage drug development. Kitov’s pipeline currently features two combination drugs(Amlodopine & Celebrex) intended to treat osteoarthritis (OA) pain and hypertension (HTN) simultaneously. Lowering development risk and cost through streamlined regulatory approval of novel late-stage therapeutics, Kitov delivers rapid ROI while making a meaningful impact on people’s lives.”

Their main drug is KIT-302 and is a combination of two drugs already approved by the FDA. It will treat osteoarthritis pain while at the same time providing help to keep hypertension under control. So, this is not a new drug per se, but another one of those combination drugs which is why the regulatory submission path with the FDA is under a Special Protocol Assessment(SPA) and 505(b)2 route. They finished their Phase III trial which evaluated the decrease in blood pressure in patients receiving this drug. According to the SPA, a 50% reduction in the daytime systolic pressure that amlodipine produces was required in order for the trail to meet it’s endpoints. And, it was VERY successful. The results showed a whopping 120% reduction! The primary endpoint was met two times over! This bodes well for FDA approval in my non-professional mind.

+ KIT-302 would be the only product, if approved, for patients with osteoarthritis pain and hypertension. This means that it treats two drugs for the price of one. It reduces the co-pay per month for patients taking these two drugs separately to just one co-pay and that is a big help for seniors on a tight budget! This and the following point address the argument that it would be easier and cheaper to take the two drugs separately. There will be 3 different dosages to help address various needs of patients.

+ Studies have shown that it INCREASES COMPLIANCE because if they forget to take their hypertension medication – easy to do as hypertension is often times asymptiomatic – they will be reminded to take it because of the pain they experience from not taking the osteoarthritis pain medication. This is projected to save the US health system lots of money(650 million/yr) as it helps patients to avoid the complications that arise from untreated hyptertension. Their presentation gives 2 quotes from third party payors: “The actual idea that pain is a stimulant for compliance is brilliant!” And another said: “People are going to use this… At the price range similar to branded Celebrex, it would enter the formulary without a problem.” Sounds likely to me!

+ It seems that KIT-302 also has a positive impact on renal function, according to the data they have so far. This would be a HUGE positive development for this drug because one serious side effect of all NSAIDs. A further study is taking place to see if this can be concretely demonstrated, but a positive outcome is not necessary for FDA approval. It will only serve to increase the confidence of approval if this is demonstrated. (June 27, 2016 study)

+ They were recently(8-2016) issued a patent that protects their product in the US through 2030! They have a great line-up of management and workers, including their lead chemist, lead pharmacologist, lead physician who used to work for the FDA and therefore they know how to go about this whole thing. This seems to me to be a big advantage for them! http://kitovpharma.investorroom.com/news-releases?item=30

6) They expect to submit their NDA within 3 months and hopefully get a PDUFA in second half of 2017 with sales to follow shortly thereafter of course. They have already been told that an advisory committee review would NOT be necessary. They have completed the manufacturing of pivotal batches required for NDA submission. The drug will be manufactured by the largest private drug manufacturing company in Israel – Dexcel Pharma. The drug will be produced with in 3 different doses, each with 3 differing amounts of amlodipine to give flexibility in use to meet the needs of patients. It will be labelled to prevent heart attack, stroke, & death. And if approved, will be the only non-steroidal approved drug on the market for preventing heart attack stroke, and death. (http://kitovpharma.investorroom.com/news-releases?item=34)

+ LOW FLOAT! KTOV has only 7.7 million shares trading with 15.3 million shares fully diluted. Low number of shares is very attractive to me. It seems to me this allows for some significant appreciation here. The market cap is about 58 million dollars(fully diluted) right now($3.78 share price/Oct. 7). There are warrants out and trading – exercisable at $3.78 in 11/2020. This is the route I have chosen to go so far, but may also buy some shares here as well.

+ In September, KTOV published an evaluation of the potential market for the drug if approved. (http://kitovpharma.investorroom.com/presentations)
There seems to be a significant market for this drug. In the US alone, there are about 12 million possible patients. They say they have or are expecting to have 7-10 years of patent protection in the EU as well. I do not think any sales figures for the EU or other parts of the world have been figured into these projections, but I’m not sure. Anyway, according to an evaluation of KTOV put out by Life Sciences in Spetember, 2016(probably a paid promotion – http://finance.yahoo.com/news/lifesci-capital-initiates-coverage-kitov-184000393.html), sales of KIT-302 are projected to reach a max of $500 million dollars in 2022(conservative in my opinion). Could be higher or could be lower, but even if sales reach only half of that already conservative figure, well, you can do the math! Sales of $250-$500 million for a company with a market cap of $60 million(US only) – WOW!

+ This regulatory pathway (the 505(b)2 route) is viewed by them to be one that entails low development risk and efficient regulatory pathways returning a quicker than usual return on investment. They are looking for new combination drugs to develop in the future as well. Sounds like a good strategy provided it works.

+ Rodman & Renshaw initiated coverage with a Buy rating on KTOV in Feb. ’16 and a PT of $10.

+ SPECULATION: What are the chances of a buyout before market launch? Could we see a buyout for 300 million or so? Certainly sounds feasible to me, but is pure speculation. Imagine though what that would do for warrant holders!! Pfizer owns the rights to Celebrex. Would they be interested? I have no idea. A partnershp announcement would also be a price mover.

So what am I missing? I am planning right now to hold long term assuming an FDA approval. I know. That part is risky and I may pare down my holdings before the PDUFA which has yet to be established. But I like their chances. Take a look at the people involved in this company. There are quite a few who previously work for the FDA – meaning they know the system. They met with the FDA back in the spring after their Phase III results were reported and were already told then that there would be no need for a Preliminary Meeting before the PDUFA. Here is how I see it playing out. They will file an NDA by the end of the year. I am thinking the stock will appreciate as we get closer to the filing. If accepted and given a PDUFA, I’m not sure what will happen to the share price over the next year – probably a pull back I would guess, however a buyout during that time could be a possibility. But assuming they get a PDUFA towards the end of 2017, I assume there will be another increase in the share price in anticipation of that. In June, it got as high as $6.5 and I assume it will reach those levels again. I buyout would be extremely accretive for both the stock and the warrants. The warrants do not expire until 11/2020 so plenty of time for appreciation here. Currently they trade around $1.76(KTOVW).

Anyway, as a non-professional, I’m sure I’m missing a number of things in this presentation, but I see a good risk/reward scenario here. I see probable approval. I see a small cap small float stock with significant cash. I see a money saving drug that even insurance companies are behind and doctors claim they will use. I see extra efficacy in the combination of these two previously approved drugs. I even see the possibility of a buyout/partnership leading up to the PDUFA – although that is probably more likely post approval. Perhaps some of you can give solid reasons as to why my ideas are ”out to lunch”. Either way, I plan to hold for a while as we approach the NDA filing at the end of the year(assuming there will be further appreciation). If I am persuaded my thinking is off base, I will probably pare down before that and take my profits( I am already up nicely here). It’s not cutting edge new science, but it seems to me they have some good results to base their NDA on. The FDA seems to recognize that as well as can be seen from the fact they were given a Special Protocol Assessment. Plus there is a current study going on to see if KIT-302 also provides help/protection for renal function that is sometimes a problem with NSAIDs. There has been some indication so far to indicate that to be true, but even if it is not verifiable, that will not affect the NDA application. It will just be more reason for approval if it is verified.

I know Doc KSS has expressed questions about whether this drug(and others like it – combos of already approved drugs) will be approved by the FDA. Certainly it is not a blockbuster drug, but there does seem to be some proven benefit from combining these two drugs which gives it a distinct advantage in my mind. I’m guessing the FDA will look favorably on this drug. Anyway, I’m writing this hoping for some pushback. What am I missing? Let me have it please. I won’t be offended. It will be a learning experience for me.

Thanks to all!!

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.