CEO of Osteologix Makes the Case for Its Strontium-Based Osteoporosis Drug

At a dinner meeting in Manhattan last evening, the CEO of specialty pharmaceutical company Osteologix Inc. (www.osteologix.com) predicted a significant market penetration for the firm's osteoporosis drug NB S101.

The product, which is currently in Phase II clinical trials, offers a number of benefits vs. the other osteoporosis drugs currently on the market today, including significantly fewer side effects, Osteologix president and CEO Philip J. Young told the group.

NB S101 (strontium malonate) is a "dual acting bone agent which significantly improves bone density and reduces fracture risk," the company says. "In preclinical models of osteoporosis, NB S101 has demonstrated beneficial effects on both reducing bone resorption and increasing high quality strong bone formation and bone mineralization. This dual action on bone ... suggests that NB S101 could fundamentally change the treatment paradigm of patients with osteoporosis."

Young projected that FDA approval of the drug will take another year or two, and in the meantime, the company continues to raise money to conduct clinical trials and promote the company with investors.

Huge Market for Osteoporosis Drugs

Young noted that the market for osteoporosis drugs is huge (about $6 billion in 2006) and is forecast to grow at about 5% a year over the next 15 years. At the same time, market penetration is only modest -- only about 20%-25% of people afflicted with osteoporosis in the U.S. are actually being treated for the problem -- so that there is tremendous room for growth of the Osteologix product.

Young stressed that NB S101 represents "a new class of drugs" providing the dual action on bone -- and with much fewer and reduced side effects -- thus representing the opportunity for substantial market penetration.

Further, the new product has patent protection through 2024 -- so that if FDA approval is received, there will be plenty of time for healthy growth.

There are currently about 25 million shares of the stock outstanding. The price as of September 26 was $1.15 per share, and the 52-week range is $0.80 to $1.45 per share. The company is based in Glen Allen, VA.

In initiating coverage of Osteologix last December with an Outperform rating, investment firm Rodman & Renshaw said that while the company is a long-term play, "with both clinical and dilution risks, we find the shares of Osteologix compelling." It added that, "OLGX is in possession of what appears to be a highly differentiated product that faces little competition in its class."