Executive Summary / Key Takeaways

• Titan Pharmaceuticals has undergone a significant transformation, shifting from commercializing its ProNeura-based Probuphine product to becoming a development-stage company focused on strategic alternatives, culminating in a proposed reverse merger with TalenTec Sdn. Bhd.
• The company's core ProNeura technology, designed for long-term, steady drug delivery via subdermal implants, represents a key potential differentiator, offering benefits like reduced administration frequency and consistent therapeutic levels compared to other delivery methods.
• Recent financial performance reflects minimal operations following the sale of core assets, with a Q1 2025 net loss of approximately $0.6 million and cash of $1.9 million, necessitating strategic alternatives for future funding.
• A critical near-term factor is the company's effort to regain compliance with Nasdaq's minimum stockholders' equity requirement, addressed by a recent $1.0 million private placement, with Nasdaq's confirmation pending.
• The primary investment thesis hinges on the successful completion of the proposed reverse merger with TalenTec, which is expected to result in a significant change in the combined entity's ownership structure and strategic direction, subject to stockholder and Nasdaq approvals.

A Company in Transition: From Probuphine to Pivot

Titan Pharmaceuticals, Inc. has a history marked by innovation and strategic shifts. Initially built around its proprietary ProNeura long-term drug delivery platform, the company achieved a significant milestone with the approval and commercialization of Probuphine, a buprenorphine implant for opioid use disorder, in major markets including the U.S., Canada, and Europe. The ProNeura technology itself is a key differentiator, utilizing a small, solid implant made from ethylene-vinyl acetate and a drug substance designed for subdermal administration. This method is intended to provide steady-state delivery of a drug over extended periods, potentially offering significant advantages in efficacy, safety, and patient adherence compared to daily or weekly dosing regimens. For Probuphine, this meant a potential six-month treatment duration from a single procedure, a tangible benefit over more frequent injections offered by competitors.

Despite achieving regulatory success and establishing commercial partnerships (like Molteni in the EU and Knight in Canada), Titan faced challenges in the U.S. market, exacerbated by factors including the COVID-19 pandemic's impact on patient access and healthcare provider interactions, as well as difficulties with procedure reimbursement rates from payers like CMS and private insurers, which management noted did not adequately compensate providers. These operational hurdles and resource constraints led to a strategic decision to discontinue U.S. commercialization of Probuphine in late 2020 and transition back to a development-stage company.

This pivot was formalized by an announcement in December 2021 to explore strategic alternatives to enhance stockholder value. The subsequent period saw significant changes in leadership and a focus on cost reduction. A major step in this transformation was the sale of certain ProNeura assets, including the drug addiction portfolio (Probuphine and the Nalmefene implant program), to Fedson, Inc. in September 2023 for $2.0 million in upfront payments and notes, plus potential future milestones up to $50.0 million and royalties. This divestiture effectively shifted the ownership and future development of these specific ProNeura applications, including the OUD and Nalmefene programs, to another entity.

The ProNeura Platform: A Technological Foundation

Even as specific assets were sold, the underlying ProNeura technology remains a foundational element of Titan's history and potential future applications, depending on the outcome of its strategic review. The core benefit of ProNeura lies in its ability to provide continuous, non-fluctuating therapeutic drug levels over extended periods. This contrasts with oral medications or injections, which can result in peak-and-trough drug concentrations that may impact efficacy, safety, or patient compliance. For a condition like opioid use disorder, steady buprenorphine levels are crucial for maintaining remission and preventing relapse. While specific quantitative metrics for ProNeura's performance across all potential drug candidates were not detailed beyond the general "6 months or longer" for Probuphine and the strategic intent for steady delivery, the technology's design inherently targets improved pharmacokinetic profiles and reduced administrative burden.

Historically, Titan explored other applications for ProNeura, including a Nalmefene implant for opioid relapse prevention (supported by a NIDA grant) and even early non-clinical evaluation for malaria prophylaxis in collaboration with research institutes. These initiatives highlighted the platform's versatility across different drug classes and therapeutic areas. While the Nalmefene program was part of the asset sale, the exploration of ProNeura for other indications, such as the previously mentioned JT-09 for chronic pruritus, demonstrated the potential to leverage the technology's long-acting delivery benefits in new markets. The strategic intent behind these R&D efforts was to apply ProNeura's advantages – potentially leading to better patient outcomes and a differentiated market position – to areas with unmet needs where consistent, long-term drug exposure is beneficial.

Competitive Landscape: Niche Innovation vs. Scale and Established Players

Titan has operated within competitive landscapes characterized by both large pharmaceutical companies and smaller, specialized firms. In the opioid use disorder market, Probuphine competed with established treatments, including other buprenorphine formulations (oral, film, injection) and naltrexone products. Competitors like Alkermes (ALKS) with its extended-release injectable Vivitrol represent significant players in the long-acting OUD treatment space. While Probuphine's implant offered a potentially longer duration (6 months vs. monthly injections for Vivitrol), ALKS benefits from greater scale, established distribution networks, and stronger financial performance, including positive revenue growth and net margins, contrasting sharply with Titan's historical financial struggles and negative margins.

In the broader context of long-term drug delivery and chronic disease treatments, Titan's potential future applications of ProNeura (or its past pipeline candidates) would face competition from large pharmaceutical companies like AbbVie (ABBV) and Johnson & Johnson (JNJ), which have extensive portfolios in chronic conditions and utilize various drug delivery technologies. These companies possess vast R&D resources, global reach, and robust financial health (significant revenue growth, high margins, strong cash flow) that dwarf Titan's capabilities. Their competitive advantages lie in their ability to invest heavily in R&D, navigate complex regulatory pathways, and dominate market access.

Even within niche areas like chronic pruritus, where Titan previously explored JT-09, other companies like Toray Industries (nalfurafine) and Cara Therapeutics (CARA) have demonstrated the efficacy of kappa opioid agonists, some of which are already approved in certain regions. While Titan's ProNeura could offer a differentiated delivery method (long-acting implant vs. oral or injection), these competitors have established clinical data and regulatory progress.

Teva Pharmaceutical Industries (TEVA), while primarily a generics company, also operates in specialty areas and could represent indirect competition, particularly if long-acting generic formulations or alternative low-cost treatments emerge. TEVA's competitive edge lies in cost efficiency and scale, areas where Titan, as a smaller, innovation-focused entity, has historically lagged.

Overall, Titan's competitive positioning has been that of a technology innovator with a potentially differentiated platform (ProNeura) but facing significant challenges in commercial execution, market access, and financial scale when competing against larger, more established players. Its strategic pivot and asset sale acknowledge these challenges, focusing the company's path forward on a potentially transformative transaction rather than direct competition with its former ProNeura assets.

Financial Footprint Reflects Transition

Titan's recent financial performance starkly illustrates its transitional state. For the three months ended March 31, 2025, the company reported minimal activity, with total operating expenses of $534,000, primarily consisting of general and administrative costs. This represents a significant decrease from $1,063,000 in operating expenses for the same period in 2024, largely due to reduced personnel-related expenses following workforce changes.

The net loss for Q1 2025 was approximately $0.6 million, an improvement from the $1.0 million net loss in Q1 2024. Other income/expense was minimal, with a net positive contribution of $29,000 in Q1 2025, impacted by higher franchise taxes compared to the prior year.

These figures reflect a company operating with a significantly reduced cost structure after divesting its core ProNeura assets and winding down commercial activities. Revenue from product sales or grants is no longer a material factor in the current financial picture.

Liquidity remains a critical concern. As of March 31, 2025, Titan had cash of approximately $1.9 million. Management's assessment in the MD&A indicates this cash is sufficient to fund planned operations through the second quarter of 2025, while a note in the financial statements suggests sufficiency through the first quarter of 2026. This discrepancy highlights the tightrope the company walks regarding its cash runway and the critical need for additional funding or a transformative event.

The company's stockholders' equity stood at $1.88 million as of March 31, 2025, which fell below Nasdaq's minimum requirement of $2.5 million, triggering a notice of deficiency on March 26, 2025. To address this, Titan completed a $1.0 million private placement of Series B Convertible Preferred Stock in April 2025. The company believes this transaction has restored its stockholders' equity to at least $2.5 million and is awaiting formal confirmation from Nasdaq. However, continued compliance will be monitored, and failure to evidence compliance in future filings could still lead to delisting.

Strategic Outlook: The Merger as the Horizon

The dominant strategic initiative for Titan Pharmaceuticals is currently the proposed business combination with TalenTec Sdn. Bhd. via a reverse merger. This transaction, agreed upon in August 2024, would see Titan become a wholly owned subsidiary of Black Titan Corporation, with TalenTec shareholders receiving shares of Black Titan. Upon completion, TalenTec security holders are expected to hold approximately 79.89% of the combined company, while existing Titan security holders (excluding certain parties) would hold approximately 20.11%.

This merger represents a fundamental shift in Titan's future direction, effectively combining it with TalenTec's business, which is not detailed in available information beyond its name. The success of this transaction is contingent upon several factors, including approval from both Titan and TalenTec stockholders and the listing of Black Titan on the Nasdaq Capital Market. The company has been working on the necessary regulatory filings, with a joint proxy statement/prospectus filed confidentially in October 2024 and subsequently amended.

Management's outlook is primarily focused on advancing this merger process and addressing the Nasdaq listing requirement. The exploration of other financing and strategic alternatives continues, but the merger appears to be the central path forward. The historical guidance regarding development milestones for the Nalmefene and JT-09 programs, mentioned in earlier transcripts, is no longer applicable to Titan following the asset sale. The current focus is on the successful execution of the merger and ensuring the combined entity can meet listing requirements and pursue its future business plan.

Risks on the Path to Transformation

The path forward for Titan is not without significant risks. The most immediate and pressing risk is the potential delisting from Nasdaq due to the stockholders' equity deficiency. While the recent private placement is intended to cure this, formal confirmation is pending, and ongoing compliance is required. Delisting could severely impact the stock's liquidity, price, and the company's ability to raise future capital, potentially jeopardizing the proposed merger itself.

The successful completion of the reverse merger with TalenTec is also subject to numerous uncertainties, including obtaining the necessary stockholder and Nasdaq approvals, as well as satisfying other closing conditions. There is no assurance that the merger will be consummated. Failure of the merger would leave Titan in a precarious position, with limited cash resources and the need to find alternative strategic paths or financing, which may not be available on favorable terms or at all.

Furthermore, even if the merger is completed, the integration of the two businesses and the execution of the combined entity's strategy carry inherent risks. The future business of the combined company is not detailed, making it difficult to assess the specific operational, market, and financial risks it will face.

Conclusion

Titan Pharmaceuticals stands at a critical juncture, having shed its former commercial focus and core assets to pursue a transformative reverse merger with TalenTec. The company's history is rooted in the innovative ProNeura drug delivery platform, a technology with the potential for significant benefits in long-term, steady drug delivery, although the ownership of its most advanced applications now lies elsewhere. Recent financial results reflect a company in a holding pattern, operating minimally while awaiting a strategic resolution.

The investment narrative for TTNP is currently dominated by the potential merger and the associated efforts to maintain its Nasdaq listing. The successful completion of the TalenTec transaction represents the primary catalyst for future value creation, fundamentally reshaping the company's business and ownership structure. However, the risks associated with the merger's completion and the ongoing Nasdaq compliance requirements are substantial and warrant close attention from investors. Titan's future hinges less on its historical ProNeura pipeline and more on the successful execution of this strategic pivot and the potential of the combined entity.