Piper Jaffray On FDA Approval Of Insys Therapeutics' Anorexia Drug Syndros
Insys Therapeutics Inc (NASDAQ: INSY) announced the FDA approval of Syndros, and is waiting on a controlled substance designation from the Drug Enforcement Agency [DEA]. Piper Jaffray’s David Amsellem reiterated an Overweight rating on the company, with a price target of $28.
Syndros is an oral solution of dronabinol, or the cannabinoid THC, and received FDA approval for anorexia associated with weight loss in patients with AIDS, and chemotherapy-induced nausea and vomiting in patients who have failed conventional anti-emetics.
Thoughts On DEA And Commercial Impact
Management had previously indicated that it expected a schedule II controlled substance designation for Syndros. “Recall that Marinol has a less restrictive schedule III designation, meaning that prescribers can write up to 5 refills (whereas no refills are permitted for a schedule II product),” analyst David Amsellem wrote.
The analyst believes a schedule II designation would not have a major commercial impact, since patients in these settings typically use dronabinol on an as-needed basis. The impact would have been higher if this were a chronic use product. Moreover, physicians in oncology supportive care are well-versed in prescribing schedule II products.
“Given these dynamics, and the fact that the product has meaningful differentiation vs. its predecessor (i.e., faster onset of action; no refrigeration needed), we believe that Syndros is well positioned to gain traction in the broader dronabinol market,” Amsellem stated. He also expressed optimism regarding a significant number of physicians who were not prescribing Marinol starting to prescribe Syndros.
Amsellem estimated peak sales of $300M-$400M+ and a long-term EPS CAGR of around 25-30 percent.
Latest Ratings for INSY
|Apr 2016||Janney Capital||Initiates Coverage on||Buy|
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