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The Undervalued Company Fighting Sleep Apnea With THC

June 12, 2017


Opportunities in Sleep Apnea Treatment


For those unfamiliar with obstructive sleep apnea, a.k.a. 'OSA', it is a "serious sleep disorder in which breathing repeatedly stops and starts during sleep." Those with OSA are subject to increased risk of developing other more severe risk factors including hypertension, congestive cardiac failure, strokes and more.


As it currently stands, there is only one approved treatment method for OSA. The constant positive airway pressure (CPAP) mask is an difficult device that is often criticized for its inconvenience and more.




Dr. Steven Park's 2015 article describing 9 reasons he hates the CPAP treatment for OSA lists many imperfections in the only option currently available.


From the periodic cleaning and maintenance, to the fact that some people lose even more sleep as a result of the device...patients suffering from OSA need another treatment option.


According to a study published by the National Center for Biotechnology Information, "estimates of disease prevalence are in the range of 3% to 7%." The study even goes as far as to say that "the available estimates of disease prevalence are likely to be lower than the true burden," and that there is "widespread under recognition of this disorder by the medical and lay communities."


Dronabinol as a Treatment Method


Dronabinol, a.k.a. synthetic Delta-9-tetrahydrocannabinol, is a laboratory-made twin of the cannabinoid that is naturally occurring in marijuana.


Since the '80's, Marinol (dronabinol capsules) has been approved by the FDA for treating appetite loss associated with AIDS as well as for nausea and vomiting associated with chemotherapy cancer treatment.


While AbbVie (NYSE:ABBV) is the one marketing dronabinol for these uses, many other pharmaceutical companies are actively researching what other indications can be treated by this synthetic THC. A quick search on Clinicaltrials.gov shows 179 studies related to Dronabinol.


Insys Therapeutics (NASDAQ:INSY) is bringing a dronabinol oral solution to market for the same indications as AbbVie's Marinol, while one under-covered company is seeking to improve OSA treatment with the same compound.


RespireRX Pharmaceuticals




RespireRX Pharmaceuticals (OTC:RSPI) is an biotechnology company that focuses on treating under-served breathing disorders and more.


According to the company's investor presentation from earlier this year, the company's dronabinol-based treatment for OSA has already completed Phase 1 and Phase 2 clinical trials, and is Phase 3 ready.


The company has an exclusive worldwide license from the University of Illinois for treating OSA with dronabinol, and has also been issued a U.S. patent that expires in 2025. Additionally, the company has pending patents on modified-release formulations as well.




If RespireRX can get FDA approval for its dronabinol OSA treatment, the company will be able to tap into the marketplace of over 35 million Americans that "stop breathing every night."




Based on the company's assumptions, the company could achieve gross sales for the drug of $1.6 billion or more, making the company's $5,150,000 market cap. insanely undervalued.


In addition to the company's dronabinol-based OSA treatment, the company also has ongoing trials for its other pipeline drugs, making RespireRX more than a one-trick pony.


RespireRX has plans to seek fast track designation, which is the FDA's program for "speeding the availability of drugs that treat serious diseases." If the company is awarded fast-track designation by the FDA, this treatment could come to market sooner than expected.




We're always on the lookout for cannabis-related investment opportunities, and RSPI certainly fits the bill. Since insurance does not cover medical marijuana, RespireRX and other pharmaceutical companies that get approval for cannabinoid-based treatments seemingly have market protection for quite some time.


As it currently stands under federal law, dronabinol is a Schedule III drug, while cannabis is a Schedule 1 drug. While we disagree with this mismatch, given the existing administration we do not see this changing in the near-term.


Given the potential market size as well as RespireRX's substantial clinical progress thus far, we believe that RespireRX is undervalued at its current market cap. of just over $5 million.


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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.




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