Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

How The FDA Decision On Egalet Corp (EGLT) Will Reverberate Across The Abuse-Deterrent Opioid Space

On October 13, the FDA informed Egalet Corp (NASDAQ:EGLT) that it would not meet the Prescription Drug User Fee Act (PDUFA) date for its decision on Arymo ER. The FDA’s final decision, when it does come, could have a big impact on other companies in the abuse-deterrent opioid space including Teva Pharmaceutical Industries Ltd. (ADR) (NYSE:TEVA), and others.

pharmacist, medical, retail, worker, team, young, staff, lab, chemistry, business, drug, chemist, adult, teamwork, internet, male, drugstore, service,


Arymo is Egalet’s abuse-deterrent formulation of morphine, which was up for review by the Anesthetic and Analgesic Drug Products Advisory Committee (AADPAC) and the Drug Safety and Risk Management Advisory Committee back on August 4. Arymo is a hard-as-steel version of morphine that cannot be chewed, ground up, or injected, or at least that is the aim of its abuse-deterrent properties. The meeting saw all 4 votes from the committee come out in favor of approval and all 3 abuse-deterrent labels. The vote was 18-1 for approval and an abuse-deterrent label for the intranasal and intravenous routes, and 16-3 for an abuse-deterrent label for the oral route. Nevertheless, the FDA demurred on meeting its deadline.

The FDA identified no particular issue with Egalet’s application for Arymo but advised the company that it is still working on the product label. Since then, the stock has tanked 28%.

Is the collapse warranted? We feel that it isn’t, and that Egalet is now a good short term buy. We say this with confidence because after thoroughly going through the 271-page transcript of the actual meeting, the joint panel did seem to be quite convinced that Arymo is in fact abuse-deterrent through all potential routes; oral, nasal, and intravenous.

So why the delay? The transcript does in fact reveal certain issues with the wording of the label, issues that were indeed brought up by many of the doctors voting on the joint panel, including those that voted yes on all 4 votes.

In this week’s Inside the FDA, we will take a close look at these issues, and why they may have caused the FDA to delay its decision. We will also look at what exactly makes Arymo abuse-deterrent, how it works, the target population, and the competition it has in the abuse-deterrent opioid space.

What may be of particular importance though as it relates to this transcript, and not just for Egalet Corp (NASDAQ:EGLT), is the FDA’s decision specifically on the oral route. This is the vote that had the largest opposition from panelists, and while only 3 panelists voted against the abuse-deterrent label for the oral route, many others raised issues with the wording of the proposed label. If the FDA does deny this label for Arymo, it would speak volumes about how FDA review panels influence actual FDA decisions. Essentially, it would mean that it is not really the final vote tally that matters most, but rather the reasons behind the votes as explained by the panelists in the meeting itself – reasons investors don’t often get from cursory news pieces on FDA panel votes.

Bottom line, it would mean that going through FDA panel meeting transcripts is much more important for biotech investors than trading just on the news of the final vote tally. Aside from the nice bounce for Egalet Corp (NASDAQ:EGLT) likely to come if and when the FDA does approve Arymo, understanding the import of FDA panel votes and the reasoning behind each individual vote has longer term value.

Follow Zyla Life Sciences (NASDAQ:ZCOR)
Trade (NASDAQ:ZCOR) Now!

Note: This article is written by Rafi Farber and originally published at Market Exclusive.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.