Mallinckrodt (MNK) received a setback when the FDA informed the company that its methylphenidate hydrochloride extended-release (ER) tablets, USP (CII) might not be therapeutically equivalent to Johnson & Johnson’s (JNJ) Concerta.
Consequently, the FDA reclassified Mallinckrodt’s abbreviated New Drug Application (ANDA) 202608 for methylphenidate ER tablets with dosage strengths of 27 mg, 36 mg and 54 mg from AB (freely substitutable at the pharmacy level) to BX (presumed to be therapeutically inequivalent).
The FDA further stated that the reclassification was based on the application of its new draft guidance for determining the bioequivalence of methylphenidate hydrochloride products as published on Nov 6, 2014.
However, Mallinckrodt is confident that its generic version is safe and effective when used in accordance with the approved labels. As per the company, the generic version was consistent with the quality specifications and regulatory requirements originally defined by the FDA. The company has received only 68 confirmed adverse events which are primarily related to a lack of efficacy when the patient switched from Concerta to the company’s generic version.
The FDA, for its part, seems to be reluctant to discuss the issue further with Mallinckrodt. Hence, the issue is not expected to be resolved soon.
We note that Concerta is approved for the treatment of attention deficit hyperactivity disorder (ADHD).
We remind investors that Mallinckrodt had received FDA approval to manufacture a generic version of Concerta in three dosage strengths – 27 mg, 36 mg and 54 mg tablets in Dec 2012.
Mallinckrodt was also entitled to a 180-day exclusivity period for each of the 27 mg, 36 mg and 54 mg strengths, which began upon the commercial launch of each tablet. The company had launched the 27 mg tablet in the first quarter of fiscal 2013 and the 36 mg and 54 mg tablets during the second quarter of fiscal 2013.
Thereafter, in Feb 2013, Mallinckrodt had submitted a supplement to its approved ANDA for the 18 mg tablet. However, the FDA issued a Complete Response Letter (CRL) to Mallinckrodt’s supplement requesting for additional information.
Shares of Mallinckrodt were down 6.5% on the news.
The decision by the FDA will adversely impact the sales of methylphenidate HCl extended-release tablets going forward. Net sales of methylphenidate HCl extended-release tablets came in at $54.7 million in the third quarter, following which Mallinckrodt upped its fiscal 2014 guidance for methylphenidate HCl extended-release tablets to at least $190 million (old guidance: at least $160 million). However, Mallinckrodt is expected to update its guidance yet again, given the FDA’s decision to reclassify.
We note that Actavis (ACT) also markets generic versions of Concerta and is expected to benefit with the reclassification of Mallinckrodt’s ANDA.
Mallinckrodt carries a Zacks Rank #2 (Buy) stock. Right now, Biogen Idec (BIIB) also looks well-placed with a Zacks Rank #1 (Strong Buy).
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