Thursday, 17 November 2011

The Data Behind Neptune’s Latest U.S. Patent - Does It Point At More Important News In The Wings?

Neptune Technologies & Bioressources
TSXV: NTB - NASDAQ: NEPT
Basic Shares: 48.2 million
Fully diluted: 53.9 million


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It should be of interest to Neptune shareholders that there’s a bit more colour to be shared around yesterday’s (November 16) announcement that it had been granted another U.S. patent; this time for the exclusive use of krill extracts in the United States as a method for reducing cholesterol, platelet adhesion and plaque formation.

The news came on the heels of last month’s announcement that, “U.S. patent No. 8,030,348 secured Neptune's intellectual property on a composition of novel omega-3 phospholipids, which are the main bioactive ingredients in all krill oils.”

This latest patent finally came to fruition from an initial application to the U.S. patent office that was made in 2001. It was supplemented in 2003 with data obtained from a 3 month clinical study of 120 people with moderate to high cholesterol.

In our discussion with management, it was clarified that the people in the study were provided a daily dosage of 1.0 to 1.5 grams/day (2 to 3 soft gel caps) of Neptune NKO™.

The study proved an average 33% decrease in LDL, which is the aspect covered by the new U.S. patent grant.

The clinical data graphical information is available by clicking on the graphic.

We are told that approximately 100 of the 120 patients were resistant to statins and failed to attain their target LDL levels after at least six months on low dosages.

This new U.S. patent deals with LDL but importantly is one “division” of Neptune’s original patent application. The company is awaiting word from the U.S. patent office on the HDL and Triglyceride components of the application.

Of note, the company expresses no opinion on the timing or the outcome of an announcement from the U.S. patent office.

However, should Neptune be granted patents based on the clinical study’s positive HDL and Triglyceride results with NKO™ versus fish oil, it would be the “perfect trifecta”, which is to simultaneously influence HDL, LDL and Triglycerides while also offering a natural alternative to people resistant to statins.

The “perfect trifecta” is a phrase coined by Dr. Tina Sampalis who is President of Acasti Pharma, 58% owned by Neptune.

Her presentation at The Howard Group’s annual Opportunity Knocks investor conference can be viewed through this link.

The granting of the two patents is also a major benefit to Acasti Pharma (APO – TSX V), which is 58% owned by Neptune. Acasti Pharma is focused on bringing to market, highly purified forms of NKO® (Krill oil) for cardiovascular/cholesterol applications. Acasti’s, CaPre™ is a pharma grade drug candidate that entered a Phase II Clinical Trial in late Q3/2011. Acasti recently commercialized two products in the over-the-counter and medical food areas.

Still on the topic of patents, today Neptune issued a direct and pointed response to the quick filing of a re-examination request of the latest patent by its main competitor, Norway headquartered Aker Biomarine.

The following sums up the position of Neptune management, Unfortunately, Aker's press release announcing its re-examination request, as well as other related statements made by Aker to the press, appear designed to mislead the public about the validity of Neptune's patent rights and the re-examination process.

It’s clear the two tough competitors are going to remain at loggerheads for some time. Unfortunately, this causes some level of investor discomfort until there is an absolute final answer as to whether or not the U.S. Patent Office will re-examine the patent grants. The timing on that question being answered is unknown. It also wouldn’t be surprising if Aker follows this tact on patents that Neptune is granted in the future.

To read the news release click here.