Endo Pharmaceuticals’ (ENDP) pain portfolio received a boost when the US Food and Drug Administration (FDA) approved the new formulation of its painkiller Opana ER.
The new formulation of Opana ER is designed to resist attempts of crushing, breaking, pulverizing or powderizing the product. The candidate aims to bring relief to patients suffering from moderate-to-severe pain and in need of continuous opioid treatment for an extended period of time.
We note that the path for US approval of the new formulation of Opana ER has not been smooth. In January this year, the FDA issued a complete response letter (CRL) for the painkiller. Even though the US regulatory body declined to approve the new formulation of Opana ER at that time, the agency did not ask for additional studies to be conducted. The FDA accepted the re-submitted application in June 2011 and assigned a target date of December 13, 2011 when it ruled in favor of approving the drug.
The new formulation will also be named Opana ER and will be marketed in the same dosage strengths as the original formulation. Moreover, the painkiller will have the same physical properties as the original painkiller and will be similarly packaged. Furthermore, the rate and extent of absorption of the therapeutic ingredient of both the formulations are similar. Management intends to complete the transition from the original version to the new version of the painkiller in 2012.
The FDA approval for the new formulation of Opana ER comes as a relief for Endo Pharma’s pain franchise as a generic threat looms over the portfolio. Endo Pharma’s lead pain drug Lidoderm is slated to go off patent in 2015.
Our Recommendation
We have a Neutral stance on Endo Pharma. The stock carries a Zacks #2 Rank (Buy rating) in the short run.
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