CEPH Cephalon (MM)

Endo Pharmaceuticals (ENDP) recently announced that the US Food and Drug Administration (FDA) has issued a new action date for the new formulation of painkiller Opana ER. The FDA stated that it will review Endo Pharma’s response to the agency’s complete response letter (CRL) by December 13, 2011.

The new formulation of Opana ER is designed to resist attempts of crushing, breaking, pulverizing or making a powder of the product. The candidate aims to bring relief to patients suffering from moderate-to-severe pain and in need of continuous opioid treatment for an extended period of time.

CRL Issued in January 2011

On January 7, 2011, Endo Pharma announced that the FDA had issued a CRL for the painkiller. Even though the US regulatory body declined to approve the new formulation of Opana ER at that time, the agency had not asked for additional studies to be conducted.

The CRL was issued in response to the new drug application (NDA) for the new formulation, a semi-synthetic opioid analgesic, filed in August 2010 by Endo Pharma. The FDA reviewed the NDA on a priority basis.

We believe that if the new formulation is approved by the FDA then it would be a boost for Endo Pharma’s pain franchise. The pain franchise received a setback recently when Endo Pharma voluntarily recalled two lots of its pain drug, Endocet, as the lots were feared to contain tablets having a higher dose of the analgesic, acetaminophen.

Moreover, a generic threat looms over Endo Pharma’s lead pain drug Lidoderm. Lidoderm is slated to go off patent in 2015. The pain products at Endo Pharma compete with players such as Cephalon Inc. (CEPH) and Pfizer (PFE).

Our Recommendation

We have a Neutral stance on Endo Pharma. The stock carries a Zacks #3 Rank (Hold rating) in the short run.

 

 

 
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