The new Viagra alternative you can invest in

While Medallion typically targets companies with longer-term track records and strong financial metrics, there are clients who request an exposure to the more speculative parts of the market.

While every sector has its own speculative prospects, these high-risk, often binary outcome plays are typically found in mining explorers looking to strike it lucky via a drilling program, or pharmaceutical and biotech companies looking gain regulatory approval.

In this instance, the business we'll be covering is in the pharmaceutical space and while there is never certainty around final approvals being gained, what we can do is highlight the logic behind why this business may be a viable prospect for those investors looking for a higher risk alternative that may deliver large returns.

What is LTR Pharma (ASX: LTP)?

LTR Pharma (ASX: LTP) is an ASX-listed clinical stage biopharmaceutical company that is developing a nasal spray solution for erectile dysfunction.

The current offerings in the market are a group of Phosphodiesterase 5 (PDE5) inhibitors, dominated by large and well-known brands such as Viagra, developed by Pfizer, Cialis by Eli Lilly and, Levitra by Bayer.

These drugs are currently provided in pill form, while LTR are developing a revolutionary nasal-administered alternative - Spontan.

Why is Spontan a game-changer?

The current problem with the pill alternatives is that on average they take around 45-60 minutes before they become effective, due to the slow absorption via the stomach.

LTR's Spontan on the other hand is delivered far more rapidly, bypassing the digestive system and transferring across mucous membrane into the patients' bloodstream, taking effect in just 10 minutes.

What this superior effectiveness of Spontan means, is that they're also able to achieve the desired outcome with a lower dose compared to the current pill alternatives.

It is expected that this lower dose may lead to a reduction in side effects and flow through to a reduction in the number of patients who currently discontinue use due those adverse effects.

Is there a market opportunity ahead for LTR Pharma?

An ageing population with increasing health issues is expected to provide tailwinds for the space looking ahead, with the market expected to grow to $6 billion in 2028.

While most current treatments are off patent and generic, making them quite cheap, it is believed that many consumers looking for ED solutions are less concerned about the price and more so about the efficacy, speed, and safety of the product, with Spontan seemingly delivering strongly on these measures.

Should they gain approval, the growth in online sales is also an exciting prospect which is expected to bring stronger margins, while also providing consumers with a more convenient experience.

How does the approval process work?

Current ED drug producers have attempted to develop a nasal therapy and been unsuccessful, but LTR has managed to put together a compound drug that does not crystalize in the bottle and can be effectively taken nasally.

Rather than developing a completely new drug and going through all trail phases again, they are simply repurposing a currently used ED drug, Vardenafil into a liquified form which can be used nasally.

Going down this path typically means an easier and faster approval process given the drug itself has already gone through and passed stringent safety and efficacy-based trial programs in the past.

Why has LTR Pharma teamed up Aptar Pharma?

The key issue for LTR to solve is developing a nasal spray mechanism that provides consistent and correct administering of the drug.

In August 2024, it was announced that LTR has agreed to a co-development partnership with US-listed Aptar Pharma ($US 10 billoin market cap) to develop a solution to the spray mechanism and to guide LTR through the US FDA process.

Aptar will also assist with the commercialisation of Spontan in the US and global markets. Particularly encouraging around LTR's chances of regulatory success is Aptar's expertise and track record in nasal spray systems, having been involved in the development of more than 50 nasal registered applications with the FDA.

What about the US FDA and Australian TGA?

In the US, LTR are aiming to lodge a new drug application with the FDA at the beginning of 2025 and if successful, licencing and partnering agreements should follow around mid-2025.

Particularly encouraging is the expectation that if approved, the FDA would provide 3-year market exclusivity, meaning competitors wouldn't be able to develop a vardenafil based nasal spray over that period.

It would be over this time that revenues would potentially skyrocket, as was seen when the likes of Viagra first arrived on the market.

In Australia, LTR expect to file with the TGA in mid-2025.

Providing early confidence and bringing awareness to doctors ahead of absolute approval, the TGA has already approved Spontan being prescribed to patients under a special access scheme, which provides medical practitioners with access to unapproved therapeutic goods for patients with unmet medical needs.

The involvement in  the scheme "enables LTR to gather real world data and raise awareness within the medical community, paving the way for broader patient access in the future".

Spontan also gained access to the TGA's authorised producer scheme in August this year, allowing registered medical practitioners to prescribe Spontan to a broader class of patients. Effectively these should enable Spontan to hit the ground running if the final approval does come through as hoped.

There is absolutely risk present but if approved we believe this type of product could generate explosive revenue growth and shake up a market that has seen minimal innovation in decades.

Logically, LTR may also become an acquisition target for these cashed up pharmaceutical giants who are looking to maintain their market dominance.

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