Shares of Lpath, Inc. (LPTN) were cruising along earlier this year at prices over the dollar mark and supported by volume fluid enough to sustain those levels. Investors were keyed into this small company's status as a recognized leader in the field of lipid-based therapeutics and were also quick to notice the interest of Pfizer, Inc (PFE), which jumped on board early on in development when it became apparent that Lpath was, at least to date, the only company to have successfully developed monoclonal antibodies against bioactive lipids.

The targeting of bioactive signaling lipids has been the subject of increased medical research over recent years and Lpath, with its ImmuneY2 platform, is the only company to yet take the technology as far along in development as it has.

Lpath's ImmuneY2 platform contains the ability to generate therapeutic antibodies that bind to and inhibit bioactive lipids that contribute to the spreading and growth of various diseases and inflammatory/auto-immune disorders. The market potential for this technology in treating a plethora of modern day illnesses and diseases, should it advance past the clinical stages, is huge, and Lpath is first applying its technology to the treatment of Wet AMD and cancer, both multi-billion dollar markets, and that could just be the beginning.

Through ImmuneY2, Lpath has developed a pipeline of two lead product candidates, iSONEP and ASONEP, with a third, Lpathomab, in earlier stages of development.

Two proof-of-concept trials for iSONEP, PEDigree for the treatment of retinal pigment epithelium detachment ("RPE detachment" or "PED") and NEXUS, targeting Wet AMD, were halted earlier this year due to FDA compliance issues with Lpath's finish/fill contractor, an announcement that sent shares quickly south of the one dollar mark and opened up what could be considered a nice buying opportunity for investors.

A subsequent stock offering sent shares even further downward, but have since started to rebound as investors took note of the fact that the expected trial re-starts could provide the catalyst needed to launch shares back to over a buck.

According to previous comments by company officials, the trials should continue in August, or at some other point during the third quarter of this year.

Although trial halts will make some investors nervous, there is no reason to believe that the temporary halt effects the potential of iSONEP in any way. In a statement issued by the company via press release at the time of the trial halt, Lpath stated that "it has taken appropriate steps to oversee Formatech's manufacturing in order to ensure product quality, it has suspended dosing as a precaution to ensure the continued safety of all patients in its clinical trials.

With that in mind, the current prices could be considered quite the bargain for potential LPTN investors, especially considering the continued investment by Pfizer.

Pfizer holds a limited first right of refusal for ASONEP in the treatment of cancer, but threw down a large sum of money to become a full partner for iSONEP. A significant up-front payment came with assurances that the full value of the deal could be worth as much as nearly half a billion dollars to Lpath, should certain milestones be met and should Pfizer decide to continue the relationship following the completion of the Phase II trials.

Additionally, if Pfizer were to stay on board during the iSONEP commercialization phase, then Lpath would be due double digit royalties on sales. It's largely assumed, however, that a full aquisition would take place well before that point as the ImmuneY2 technology would have been proven to work as advertised and could lead to multiple new and ground breaking treatments for Pfizer.

The full potential of Lpath's pipeline should not go unnoticed to investors.

Morgan Joseph slapped a price target of $8 on the company - along with a rating of 'Buy' - based on market potential of the pipeline and the ImmuneY2 technology. Should the pipeline progress with success, then even that enthusiastic price target could look like a small number, but it would be widely assumed that Pfizer would jump in and all-out purchase the company before reaching market valuations that high.

With the trial re-starts pending and other potential catalysts surrounding Lpath, Inc. and its novel technology, it's time to put this one back on the radar and consider the fact that shares may again be undervalued, at least based on the potential of the pipeline and partnership.

Disclosure: Long LPTN.

Contact VFC's Stock House: vfc@vfcsstockhouse.com

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