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Q1 10-Q, Development On-Track

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Q1 2012 10-Q Filed

FluoroPharma filed their 10-Q for the first quarter ending March 31, 2012 on May 15th.  Operating expenses continue to be inline with our expectations and were approximately $937k in Q1, up only slightly from the prior quarter ($870k).  

Net loss to common and EPS were $853k and ($0.04) compared to our estimates of $1.1 million loss and ($0.05).  

Cash used in operating and investing activities were $847k and $31k in Q1, also inline with our estimates.  Cash used in operations was up slightly from Q4 2011 ($711k).  Cash balance was $2.39 million at 3/31/2012.  

There have been no surprises relative to our assumptions regarding product development or related timelines.  As such we have made no changes to our prior outlook and our Outperform rating and $2.00/share price target remain intact.     

FPMI's Product Candidates

FluoroPharma's current focus is on three separate cardiac molecular imaging pharmaceuticals, two of which (CardioPET and BFPET) are in clinical-stage.  CardioPET entered phase II in Q1 2012 with BFPET expected to start phase II trials later in 2012.  The third candidate (VasoPET) is still in early development stage with initial clinical testing still likely to be years away.  If all goes to plan, the first of the three products could be on the U.S. market within the next five years.  FluoroPharma's products are aimed at improving overall patient care via improved disease detection and help better guide appropriate treatment.  FluoroPharma's PET agents are expected to; provide significantly greater diagnostic accuracy compared to currently employed nuclear imaging agents and modalities, increase the use of PET in cardiac imaging, and help reduce the number of unnecessary diagnostic and therapeutic procedures.        

FluoroPharma obtained the licenses to the patents (composition of matter and some method of use patents) of the proprietary technology and indications related to their products from the Massachusetts General Hospital MGH).  There are currently four patents issued and seven patent applications pending.  Any future patent applications are expected to be initiated by FluoroPharma.

Additional terms of the licensing agreement with MGH require FluoroPharma to meet certain development milestones related to clinical trials and FDA regulatory filings.  In the event FluoroPharma fails to hit certain of these milestones, MGH has the right to cancel or make non-exclusive the licenses related to these product candidates.  As of 3/31/2012 (the most recent reporting period), FluoroPharma was current with the stipulated milestones.  The agreement also calls for FluoroPharma to pay royalties equal to 2% of revenue with a minimum of $50k per year beginning with the first commercial sale.          

 Current Development Timelines

BFPET  is a novel blood flow imaging agent being developed for use in conjunction with stress-testing for the detection of ischemic (reversibly damaged) and infarcted (irreversibly damaged) tissue within the myocardium in patients with suspected or proven chronic CAD.  BFPET, a Flourine-18 labeled tracer, has been designed to enter the myocardial cells of the heart muscle in direct proportion to blood flow and membrane potential - which are the two most important physiological indicators of adequate blood supply to the heart.  BFPET has been designed to effectively differentiate among those cells of the myocardium that are ischemic, infarcted and those that are healthy.  Because ischemic and infarcted cells take up significantly less BFPET than normal healthy myocardial cells, the signal emitted by BFPET is inversely proportional to the extent of myocardial injury.  Therefore, as a result of BFPET’s use, FluoroPharma believes ischemic heart tissue can be more reliably detected using BFPET.  BFPET is expected to primarily be used in conjunction with stress-testing for patients with suspected or proven chronic CAD.  If approved, BFPET will represent the first molecular imaging blood flow agent commercialized for use in the cardiovascular segment of the PET imaging market.
BFPET has completed phase I trials and is entering phase II trials to assess its efficacy in CAD subjects.  Phase II trials will compare BFPET to Rb-82.  Per FPMI's 10-K filed on 3/16/2012 the company expects phase II trials for BFPET to begin in 2012.  Based on current expected timelines, we believe phase II trials might be completed by sometime in 2013.  If all goes to plan, phase III trials could wrap up and an NDA filed by the end of 2015.  This potentially puts BFPET on the U.S. market by 2016.  

Phase I trials (used to assess safety / tolerability, distribution and dosimetry) consisted of 12 healthy individuals which were injected with one dose of BFPET while at rest (i.e. - not stressed-tested).  Results, announced in July 2008, showed a favorable profile on all categories (safety, distribution, dosimetry) and no adverse events were experienced.  

CardioPET is a novel molecular imaging agent (also labeled with Flourine-18) in development for the assessment of myocardial metabolism.  FluoroPharma intends to develop CardioPET for use in the following areas: (a) detection of ischemic and infarcted tissue in patients with suspected or proven forms of acute and chronic CAD, including those that cannot undergo stress-testing; and (b) Cardiac Viability Assessment (CVA), for the prediction of functional improvement prior to, or following revascularization in patients with acute CAD, including myocardial infarction.

FluoroPharma believes that CardioPET may be ideal for CVA through its ability to specifically identify jeopardized but viable myocardium - that is, heart tissue that has suffered an acute episode of ischemia, but is still viable. Identifying viable myocardium, also referred to as hibernating or stunned myocardium, from non-viable scar tissue is crucial because it is well documented that revascularization in patients with substantial viable myocardium results in improved left ventricular dysfunction and survival.  The company believes that CardioPET, if approved, may have several significant advantages for assessing cardiac viability using PET, and would represent the first imaging agent available in the U.S. for use in patients with acute and chronic CAD that cannot undergo stress-testing. CardioPET is designed to provide the metabolic component for CVA.  Accordingly, it may be used with either BFPET or other blood flow agents in performing CVA.

In the acute setting, CardioPET could potentially play a critically important role in emergency rooms, helping to better assess the risk of patients presenting with signs of acute coronary syndrome.  Patients coming into emergency departments that show signs of ACS are initially triaged based on a review of their medical history and through some gate-keeper type of tests such as a chest x-ray, EKG and certain biomarker tests such as Troponin.  While these tests are generally good for providing information relative to whether someone has recently suffered a cardiac event such as a heart attack, they have certain shortcomings.  EKG's have shown to be highly accurate in the confirmation of ACS but suffer from high false positives - which means many low-risk patients may be inaccurately diagnosed as high-risk.  Troponin and other biomarker tests, used to detect elevated levels of certain proteins released following a heart attack, are accurate in determining whether a cardiac event occurred but the accuracy of the tests is highly dependent on when they are administered as these biomarkers peak in the body ~8 to 24 hours after the onset of a heart attack.  This means triage decisions may be delayed, potentially putting a patient at greater risk.  

While these gate-keeper tests are generally valuable for triaging patients to a high-risk group (which should be admitted to the hospital immediately), they provide less guidance for intermediate and low risk groups.  This often results in either over- or under-diagnosis and inappropriate follow-on testing and treatment for intermediate and lower risk patients.  CardioPET could be ideal adjunctive test for this patient population, which accounts for ~85% of the patients emergency departments see every year with signs of ACS.  CardioPET could allow emergency room physicians to better diagnose these patients determine the next course of action - whether it be release and outpatient follow-up or admit to the hospital and treatment.       

CardioPET has completed phase I trials and in March 2012 FluoroPharma announced the initiation of phase II trials.  The company signed a letter of intent with SGS Life Sciences to provide clinical research services for phase II trials of CardioPET.  The Belgian-based trial will be open label and designed to assess safety and performance of compared to stress echocardiography, myocardial perfusion imaging (MPI) and angiography.  The trial will be conducted at two sites in Belgium with results anticipated in 2H 2012.  Enrollment is expected to consist of between 30 and 100 patients with known stable chronic coronary artery disease that can not undergo stress testing.  
If all goes to plan phase II will wrap up in 2013 and phase III completed and an NDA filing potentially happening by the end of 2015.  U.S. launch could potentially happen by 2016.

Phase I trials (used to assess safety / tolerability) consisted of 6 patients with diagnosed CAD and 15 normal healthy volunteers (i.e. - control group).  Phase I testing completed in April 2007 and demonstrated CardioPET was safe with no patients experiencing any adverse events.         
Role of Inflammation in Plaque Rupture


FluoroPharma is developing VasoPET as a novel molecular imaging agent for the detection of vulnerable coronary artery plaque in patients with CAD.  VasoPET, if approved, would represent the first PET cardiac product to reliably image inflamed plaque and therefore may differentiate between vulnerable and stable coronary artery plaque.  
The rupture of atherosclerotic plaques and the subsequent formation of thrombi are currently recognized as the primary mechanisms of myocardial and cerebral infarctions.  Therefore, the detection of vulnerable plaque in atherosclerotic lesions is a desirable goal—and to date remains both a significant unmet clinical objective and a large unaddressed market opportunity.

Coronary artery plaques grow over time and progressively narrow the lumen (i.e. - opening) of the coronary artery until blood flow to the heart diminishes to a critical level.  The decrease in blood flow causes symptoms of chest pain (angina), at first during exercise and then progressively during rest.  Rupture of the plaque and/or clot formation overlying the plaque may then result in myocardial ischemia and/or myocardial infarction.  Coronary artery plaque that is vulnerable is differentiated from its stable form by a large lipid-rich atheromatous core, a thin fibrous cap, and infiltration by inflammatory cells such as macrophages. The risk factor for rupture (and subsequent heart attack) is currently thought to be independent of plaque size and arterial narrowing, but rather is thought to correlate more with the presence of inflammation.

VasoPET has completed preclinical testing and preparation for an investigational new drug (IND) application is currently ongoing.  Based on current expected timelines, an IND could be filed and phase I trials started towards the back half of 2014.  Eventual FDA approval and subsequent launch is likely to be at least six years away (~ 2017+).  


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