Pain Therapeutics' Remoxy Would Be A Good Fit For Any Of These Experienced Companies

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Includes: AGN, DRRX, ENDP, JNJ, MNK, NVS, PTIE
by: Clinically Sound Investor

Summary

Five publicly traded companies have at one time sold abuse deterrent painkillers in the U.S. and should be attracted by the $2.5 billion gained by rival Purdue Pharma's Oxycontin.

Pain medication specialist Mallinckrodt is already under contract to make Remoxy and is the most sensible option.

Alternatives are Endo, Actavis, Janssen, and Sandoz, all of whom are veterans in the pain market and have no competing oxycodone-only products.

After Pfizer (NYSE:PFE) returned the rights to Remoxy, an investigational extended-release (or ER) oral painkiller, to Pain Therapeutics (NASDAQ:PTIE) and DURECT (NASDAQ:DRRX), there is great uncertainty whether a new drug application (or NDA) for this abuse deterrent formulation of oxycodone could get resubmitted to the Food and Drug Administration (FDA) next year, if at all. However, the market is too big (Oxycontin grossed $2.46 billion last year) and the finish line so close for Remoxy to remain ignored for long. The following companies all have experience in marketing abuse deterrent painkillers. None of them have an extended-release pure oxycodone product whose sales could get cannibalized like Pfizer or Purdue Pharma, the maker of Oxycontin, making them potential partners at least in theory.

Mallinckrodt Pharmaceuticals (NYSE:MNK)

Abuse-Deterrent: Exalgo ER, Xartemis XR

Mallinckrodt is the world's largest supplier of controlled substance pain medication and is also one of the top 10 U.S. generic pharmaceutical companies, based on prescriptions written in 2013. It sells an osmotic pump oral tablet formulation of hydromorphone, Exalgo, the exterior of which is hard enough to minimize intentional abused through biting, chewing or extraction. Approved by the FDA on March 1, 2010, Exalgo had total U.S. sales of approximately $230 million for the 12 months ending February 28, 2014, according to IMS Health, but its patent expired this year. On Mar. 12, 2014, the FDA approved Xartemis XR, the first extended-release oral combination of oxycodone and acetaminophen, but did not allow abuse-deterrent language; Mallinckrodt is conducting additional studies and will be submitting additional data in the near future. In addition, Mallinckrodt is still obligated to manufacture Remoxy under the old Pfizer contract, so it's the most logical choice among this group of companies to carry out the commercialization as well.

Endo Pharmaceuticals (NASDAQ:ENDP)

Abuse-Deterrent: Opana ER

Endo transitioned to a reformulated Opana ER CRF in March 2012 that incorporates a polyethylene oxide matrix rendering the tablet highly resistant to crushing without affecting its ER properties and when exposed to water forms a gel which is difficult to draw into a syringe. Post-marketing surveillance data demonstrated a significant 59% reduction in abuse for nasal abuse (snorting) to go with the already low intravenous abuse rates of the original. However, the FDA concluded that the reformulation can be compromised with methods that won't be repeated here, which was one of the factors allowing Impax and Actavis (NASDAQ:ACT) to launch generic versions of the non-crush-resistant formulation on January 2, 2013 and September 12, 2013, respectively, which negatively impacted revenues. Net sales of Opana ER still reached $227.9 million for the year ended December 31, 2013 and accounted for approximately 9% of Endo's 2013 total revenue.

Actavis

Abuse-Deterrent: Hydromorphone ER

Actavis is the third-largest generic pharmaceutical company in the U.S. On Sept. 12, 2013 it launched oxymorphone extended-release tablets, the generic equivalent to the previously marketed formulation of Opana ER, which Endo voluntarily withdrew from sale in 2012. Then in May 13, 2014, it received approval from the FDA on its Abbreviated NDA for a generic version of Exalgo.

Janssen Pharmaceuticals, of the Johnson & Johnson (NYSE:JNJ) family

Abuse-Deterrent: Nucynta ER

Janssen is the world's sixth-largest pharmaceuticals company and sells both immediate and ER versions of tapentadol. Like Opana, Nucynta ER (approved in 2011) was developed with abuse deterrent properties such as a polyethelene oxide matrix (physical barrier) which confers resistance to tablet tampering (crushing, chewing or dissolving), but both were approved prior to issuance of the FDA's Draft Guidance document and their labels do not include any mention of abuse deterrence properties or attributes.

Par Pharmaceutical (private)

Sandoz, the generic pharmaceutical division of Novartis (NYSE:NVS).

Abuse-Deterrent: generic versions (pulled off market) of OxyContin by Purdue Pharma

Par Pharmaceutical is the fifth largest U.S. generic company as ranked by IMS sales in Q3 2013, while Sandoz is the world's second largest producer of generics. Both companies settled their respective lawsuits with Purdue and agreed that their formerly marketed products infringed on patents relating to OxyContin and both agreed not to make, have made, use offer to sell, sell, or import generic oxycodone products until separate undisclosed dates. However, the settlement doesn't preclude them from marketing a branded oxycodone product like Remoxy.

Disclosure: The author is long PTIE, DRRX.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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