By: Tomas Ronolski - AllPennyStocks.com News

Friday, April 4, 2014

Sialorrhea, sometimes called hypersalavation, is a persistent drooling problem for many people, probably more than most realize. Saliva is primarily produced from three major salivary glands, the parotid gland, the submandibular gland and the sublingual gland. Sialorrhea can have many causes, such as infection and poisoning, but it is frequently found in people with neurological conditions, such as Parkinson’s disease and cerebral palsy. Suffering from sialorrhea brings with it more than just psychosocial problems as it is surely embarrassing and stigmatizing; it also can lead by physical complications, including perioral chapping, odor and dehydration. The condition can be so difficult to treat, that some patients have to resort to surgery to have one or more salivary glands removed or salivary duct ligation. Merz Pharmaceuticals, LLC markets Cuvoposa™ for the treatment of sialorrhea in children. Cuvoposa is the only drug approved by the U.S. Food and Drug Administration for the treatment of chronic severe drooling in pediatric patients, aged 3 to 16. North of the U.S. border, Merz Pharma Canada has just granted exclusive commercial rights for Cuvoposa to Pediapharm, Inc. (TSX-Venture:PDP), expanding the specialty pharmaceutical company’s portfolio to seven products.

Other products currently marketed by Pediapharm include EpiCeram for atopic dermatitis, Suprax for bacterial infections, Kool Effect, a hydrogel patch for migraines or fevers, NYDA for head lice, Vapolyptus Patch, a patch that emits eucalyptus and camphor vapours, and Tips-haler, a valved asthma chamber for use with ISObreath valve systems.

Cuvoposa, which comes in a cherry-flavored oral solution, is available via prescription in the U.S. The drug acts to control drooling by inhibiting stimulation of acetylcholine receptors in peripheral tissue, including the salivary glands. Pediapharm intends to register Cuvoposa this year and, upon approval, launch the product to the Canadian marketplace in 2015. Clinical trials supporting the efficacy of Cuvoposa showed the treatment to better manage sialorrhea in 75 percent of patients in the treatment arm of a Phase 3 study.

"Based on our discussions with experts in the field, chronic severe drooling is a poorly managed condition in up to 30% of children with CP. Because the treatment options available in Canada are limited, this may lead to various health issues and a decreased quality of life in that patient population," said Benoît Hébert, Pediapharm's Vice President of Business Development and Licensing, in a prepared statement on Friday.

If the company can garner marketing approval from Health Canada, Cuvoposa sales could be a catalyst to already growing revenue. Last Friday, Pediapharm released its financial report for the fourth quarter and full year 2013. Quarterly revenues were up by 117 percent year-over-year to $1.24 million. For the 12-month period, sales rose to $4.0 million form $2.5 million in 2012. Net loss for 2013 was essential flat at $2.51 million, versus $2.25 million a year earlier. Most of the net loss for 2013 was attributable to the amalgamation with Chelsea Acquisition Corporation, as demonstrated by operating loss decreasing substantially to $440,164 in 2013, compared to $2.08 million in 2012.

With the merger, the company has only been trading as the new entity since December. Shares initially rose from 50 cents to 65 cents, but have since backtracked to a low of 35 cents on Friday. With a market capitalization of only around $22 million now, retail investors may start looking at Pediapharm as a speculative growth play as it trends towards profitability. Proper due diligence is, as always, encouraged.

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