What Investors Are Watching Ahead of Zogenix's FDA Approval Decision
Although it received FDA approval in 2013, Zogenix, Inc. (NASDAQ: ZGNX) had a lackluster 2014. The stock fell about 70 percent on the year, as investors exited due to political pressure about the company's approved product, Zohydro Extended Release (ER).
Zohydro ER is an opioid antagonist of hydrocodone bitartrate used in patients with chronic pain.
The benefits of Zohydro ER are that it lasts twelve hours and is easy on the liver. Zohydro does not include acetaminophen, which is what causes liver problems in patients that take Lortab or Vicodin.
However, Zohydro is not formulated with new tamper-resistant technologies. This makes the drug easy to crush, snort, or chew.
Due to this, Zohydro has received negative press, as many looked at Zohydro's FDA approval as a step backward in the fight against opioid addiction. Since the current formulation of Zohydro is not tamper-resistant, many believe it will be easily abused.
Zogenix addressed these concerns, and now has a PDUFA date set for January 30 for an abuse deterrent version of Zohydro. If approved, the new formulation could replace the current formulation in the spring of this year.
This scrutiny is not new in the opioid market. Blockbuster drugs Oxycontin and Opana were also taken off the market to reformulate a tamper-resistant version.
Some opioids on the market are still not tamper-resistant.
On November 20, 2014, the FDA also approved Purdue Pharma's tamper-resistant Hysingla ER. Hysingla is the second pure hydrocodone drug approved by the FDA. Zogenix is eligible to receive royalties on net sales from Hysingla, if certain sales conditions are met.
On January 20, Zogenix filed an EFFECT form for its S-3, which means the company is able to raise capital very soon. It is likely the company will raise money after the upcoming FDA decision to fund rolling out the new version of Zohydro.
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