Neuroderm Ltd (NASDAQ:NDRM) just gave us un update on its pipeline, and two elements in particular stood out as being potential drivers of near term volatility. The first, topline from a pharmacokinetic dose finding trial out of Europe – phase II – in a severe Parkinson’s disease indication. The second, the initiation of a phase III in a moderate Parkinson’s disease indication, during the third quarter of 2016. Both events have the potential to inject some upside momentum into the company’s market capitalization, so let’s take a look at the candidates in question in an attempt to decipher what’s important for each.

First, then, let’s look at the treatments. Essentially (or at least from a scientific perspective) they are the same. The only real difference lies in administration concentration. This means we can address the underlying science for both ND0612L (the moderate indication) and ND0612H (the severe indication) together at the same time.

Both drugs are alternative administration methods for the current standard of care treatment in Parkinson’s disease – levodopa (or L-DOPA). This drug is designed to increase dopamine levels in Parkinson’s disease patients, and in doing so, smooth out the on-off periods that sufferers of the condition endure. The problem with the treatment in its current form, however, is that it is only available via oral administration. In the early stages of the condition, this is an effective treatment. As the disease progresses, however, the efficacy of oral administration L-DOPA reduces. In severe Parkinson’s sufferers, it becomes pretty much ineffective.

There exists a number of subcutaneous administration alternatives, which can serve to overcome the efficacy issues associated with the late stage oral administration. They aren’t particularly convenient, however, and in a condition where motor skills are impaired, are not practical for self administration (as they might be for another condition, say diabetes, for example).

Neuroderm’s solution, the ND0612L and ND0612H candidates currently under trial, are liquid versions of L-DOPA, which the company has inserted into a belt type mechanism. The patient wears the belt around his or her waist, and the technology administers L-DOPA subcutaneously via a fixed tube that spans from a capsule containing the active compound, to a site on their abdomen.

The advantages of this setup are plentiful, but primarily two-fold. First, the system allows for continuous administration throughout the day without the patient having to intervene manually. Second, the subcutaneous administration has a far superior pharmacokinetic profile to the oral administration version, meaning it has a far higher potency. This increased potency makes it more suitable for late stage sufferers, for whom the oral administration has become ineffective.

The difference between the L and the H versions? The L version has a medium concentration formulation of L-DOPA, and the H version has a high concentration version. Simple.

So, what are the milestones we alluded to in the introduction, and what are we looking out for?

In the high dose, topline from the dose finding study is expected before the close of the second quarter of this year. A previous trial (of almost identical setup) demonstrated an average maximum plasma levodopa concentration of approximately 1500ng/ml when administered alone. As such, in the ongoing trial (and the upcoming topline) we will be looking for a similar maximum concentration (across an eight-hour period) as an indication of consistency.

In the lower dose (the moderate sufferers) the company is set to report topline from a pivotal in Europe before the close of the third quarter. This is the bigger impact data, and will likely offer up some serious upside momentum (35-45%) Iin the company’s capitalization if the data comes out as indicative of efficacy. The primary endpoint for the trial is the change from Baseline to Week 16 in the mean percentage of “OFF” time during waking hours, based on patient’s home diary assessments. In other words, if the patient reports a mean reduction in OFF periods, it demonstrates efficacy, and this is what we are looking for as indicative of some near term upside. The higher the degree of reduction (i.e. the lower the amount of time spent OFF) the higher the inferred efficacy, and in turn, the higher the potential upside on the announcement.

It’s going to be a busy few quarters!