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Avanir Pharmaceuticals Inc. (NASDAQ: AVNR) is a pharmaceutical company that focuses on uncommon central nervous systems conditions. Shares of the company gained significantly during the first two weeks of June, with the share value increasing a solid 19% during the second week. This interest from investors may be the result of the Food and Drug Administration allowing an accelerated development of the advanced compound AVP-786, a proposed neuropathic pain medication for neurological disorders.

The AVP-786 compound is thought to be a new and better medication compared to Avanir's drug Nuedexta, which was the first drug approved by the Food and Drug Administration for the treatment of a rare condition called pseudobulbar affect, or PBA. In the meeting with the Division of Neurology of the Food and Drug Administration, Avanir Pharmaceuticals Inc. was able to use certain data from the extensive studies it conducted for their compound AVP-923 to support the AVP-786 Investigational New Drug application process. The compound AVP-923 is being tested in many ongoing clinical trials for its effectiveness in Multiple Sclerosis, Alzheimer's disease, autism, and Parkinson's disease. However, the FDA has not approved the AVP-923 compound for the above mentioned uses.

Following the announcement, Avanir's shares increased 8.6 percent in pre-market trading. Before the announcement, the stock had appreciated 29 percent already since the beginning of this year. Investment firm Mizuho established $10 per share as the price target, which is more than twice the current share price, while issuing the stock a buy rating.

According to Joao Siffert, Chief Scientific Officer at Avanir Pharmaceuticals Inc., the compound AVP-786, which will be used as a metabolic inhibitor, may significantly decrease the time and cost to market the product. He added that the company expected to integrate the AVP-786 compound with several other development programs, particularly in areas of Alzheimer's disease, some cases of Parkinson's disease, and neuropathic pain. Mr. Siffert also added that Avanir Pharmaceuticals will be using the vast information gathered during the development of the compound AVP-923 when filing for AVP-786 with the Food and Drug Administration.

This means that Avanir Pharmaceuticals Inc. will need to perform only a limited number of preclinical trials before progressing to human clinical trials. If things go as planned in the preclinical and the clinical stages, AVP-786 could hit the market a lot sooner, reducing Avanir Pharmaceuticals' trial costs. Although this is unquestionably good news for the company, nothing is set in stone. Investors should be on the lookout for any new developments regarding the company or the various clinical trials that will be conducted for the AVP-786 compound.

Meanwhile, investors should also pay attention to Nuedexta, the first drug approved by the Food and Drug Administration for the treatment of a rare condition called pseudobulbar affect. During the second quarter of this year, Nuedexta's net revenue increased 81 percent, compared to a year ago, to $16.5 million. Compared to the previous quarter, net revenue increased 11 percent, while peak sales estimates range from $300 million to $500 million.

Source: Why Buy Avanir Pharmaceuticals