Zosano Pharma Corp (NASDAQ:ZSAN) Could Be Collecting Revenues On Its Migraine Asset By Early 2018

On the release of some data early this week Zosano Pharma Corp (NASDAQ:ZSAN) ran up more than 75%, and a small correction aside, has held on to the majority of these gains for the subsequent forty eight hours. At time of writing, US afternoon on Thursday, the company is up close to 10% on the daily open, and looks set to gain further strength heading into the close of the week.The reason it's drawing so much attention is that the data it put out opens up the potential for Zosano to attract a portion of a multi billion dollar market, and align itself with some of the biggest names in the healthcare space.With the gains in place, then, the question becomes, what's next?We think there's plenty of room for further appreciation here, and this suggestion is rooted in a couple of different scenarios. Before we get into them, however, let's quickly outline what just happened, and what it means.So, the data relates to a drug called M207, which Zosano has developed (and is currently investigating) as a treatment in a migraine indication. The drug is built using Zosano's proprietary platform, which seeks to take currently available formulations and convert them to patch-administration. In other words, find a drug that couple benefit from a more direct administration route, and create a patch that delivers said drug. M207 employs this concept with M207, using a drug called Zolmitriptan as the base formulation and its microneedle patch technology as the administration method.Anyway, the action derives from data that the company put out this week, detailing the results from a phase III investigation of the M207 asset in the above mentioned migraine indication. There were two endpoints under investigation, one of which was pain freedom (as it sounds, did the drug result in a removal of the pain symptom of migraine onset?) and most bothersome symptom freedom at two hours (again, this generally refers to pain, so is there any pain at two hours?)As the action seen from the company over the last few days infers, the data hit on both endpoints. Not only hit, but basically smashed the endpoints out of the park. 41.5% of patients that received M207 treatment were pain free after administration, and 68.3% were relieved of their most bothersome symptom at two hours post-admin. These numbers reflect against a pain free percentage of just 14% for a control arm, and a most bothersome symptom relief percentage of a little over 42% for the same arm.The reason these data are so important is that this market is huge. Migraine patients have a number of treatments available to them right now (of which Zolmitriptan one) but each has its own drawback and – for many – the current SOCs simply don't work.With M207, Zosano is trying to bring a very fast acting formulation of an already effective drug to market, and with the data in hand, it looks as though it stands to draw a decent portion of the market towards its own balance sheet. This is a market that analysts expect will be worth a conservative $5 billion by 2020, and that some of healthcare's biggest names are scrambling to take a chunk of. The data that Zosano has in-hand right now should be sufficient to underpin the submission of a registration application to the FDA, meaning we could see a PDUFA data set for some point late 2017, or at the outside, early 2018. Taking that a step further, Zosano could have this product on shelves by the end f the first quarter next year.Sure, it's probably going to need to raise cash to fund a commercialization run, and this is probably going to serve up some near term dilution, but if it can successfully execute on a rollout strategy (assuming approval, of course) then the upside considerably outweighs any dilution driven risk.We will be updating our subscribers as soon as we know more. For the latest updates on ZSAN, sign up below!Disclosure: We have no position in ZSAN and have not been compensated for this article.