Investors love biotech stocks for the lottery ticket-like returns they can offer if a company strikes medical gold or wins the regulator’s bless. Case in point: Egalet Corp (NASDAQ:EGLT), whose shares are jumping over 20% on Friday. The reason? The pharmaceutical company’s ARYMO ER received FDA tentative approval for an expanded label for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.
The FDA has issued tentative approval for a supplement submitted earlier in 2017 to update the ARYMO ER prescribing information with data from a Category 2/3 intranasal human abuse potential (HAP) study and an intranasal abuse-deterrent claim. This data was previously excluded from the label at original new drug application (NDA) approval due to exclusivity granted to another company. The final approval is expected to be granted when the exclusivity period expires on October 2, 2018.
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“Given that extended-release morphine is the most frequently prescribed ER opioid for individuals living with chronic pain and the majority of those prescriptions are in easy to abuse formulations, we believe that strengthening the ARYMO ER label to include additional abuse-deterrent data is an important improvement for chronic pain patients and their communities,” said Mark Strobeck, Ph.D., chief operating officer of Egalet. “While opioids should be reserved for situations when all other alternative therapies have been tried, when opioids are needed, having abuse-deterrent options is important.”
On the ratings front, Egalet stock has been the subject of a number of recent research reports. In a report released today, Cantor analyst Brandon Folkes assigned a Buy rating on EGLT, with a price target of $7.00, which represents a potential upside of 488% from where the stock is currently trading. However, on November 9, Gabelli’s Kevin Kedra downgraded the stock to Hold.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Brandon Folkes and Kevin Kedra have a yearly average loss of 4.0% and a return of 5.8% respectively. Folkes has a success rate of 27% and is ranked #3777 out of 4717 analysts, while Kedra has a success rate of 43% and is ranked #2574.
Egalet engages in developing and manufacturing pharmaceutical products. Its products include ARYMO, OXAYDO, and SPRIX Nasal Spray.