In a research report issued Thursday, Maxim analyst Jason Kolbert reiterated a Buy rating on shares of IntelliPharmaCeutics Intl Inc (USA) (NASDAQ:IPCI), while slashing the price target to $2.00 (from $6.00). (To watch Kolbert’s track record, click here)
The reason? The drug maker was smashed at the FDA advisory panel yesterday with a 22 to 1 vote finding that the Company’s NDA for Rexista abuse-deterrent oxycodone hydrochloride extended release tablets should not be approved at this time. The committees also voted 19 to 4 that the company has not demonstrated that Rexista has properties that can be expected to deter abuse by the intravenous route of administration, and 23 to 0 that there are not sufficient data for Rexista to support inclusion of language regarding abuse-deterrent properties in the product label for the intravenous route of administration.
Kolbert noted, “One panel member commented that the dye could be a fashion statement for kids at a rave. Has he ever been to a rave? Do kids at rave’s use opioids? For us, the panel just didn’t make sense. The results of the vote suggest a lot is going on here and there may be tones that the government just does not want to approve more opioids in a period where it has become a national epidemic.”
“If we remove Rexista from our model, fair value drops to $2, from $6. For the moment that is exactly what we are doing. As such, any incremental positive progress on Rexista represents upside to our forecast,” the analyst continued.