Piper Jaffray Comments On XenoPort Following FDA Approval

Last night, Xenoport (NASDAQ: XNPT) and partner GlaxoSmithKline (NYSE: GSK) announced that the FDA approved of Horizant (gabapentin) for the treatment of restless leg syndrome (RLS). This marks an extraordinary turnabout for the product after the market essentially wrote it off subsequent to the FDA raising concerns about a pancreatic cancer signal seen in rats at very high doses.

Gabapentin has a long track record of safety, and Piper believes that physicians treating RLS patients, particularly in the primary care setting, will have greater comfort with Horizant than dopamine agonists, which Piper views as having more troublesome safety limitations. With the approval opening the door for a label expansion in post-herpetic neuralgia, and with XP19986 a low-risk shot-on-goal in spasticity in Piper's view, it would be buyers of XNPT even beyond the expected gap up in the shares today.

Piper Jaffray has a $14 PT and Overweight rating on XNPT

XNPT closed Wednesday at $6.38