Zogenix shares crater after FDA experts gun down new pain drug
After its pain drug was shot down in a lopsided vote among FDA experts on Friday and analysts weighed in with a dour assessment of its chances at the hands of regulators, investors exacted their revenge on Zogenix ($ZGNX) today by wiping out half of the company's share price.
There was nothing particularly wrong with the safety and efficacy of Zohydro, the experts offered. But the use of the narcotic hydrocodone in the extended-release pain pill made it a prime candidate for prescription drug abusers who have already made that essential ingredient one of their top drugs of choice. This particular drug is open to abuse by addicts who crush and snort drugs in this category, and that wasn't acceptable to the panel.
"Why not raise our standard as we move forward for society?" offered Alan Kaye, a panel member and chairman of the anesthesiology department at the Louisiana State University School of Medicine, according to Bloomberg.
The setback opened a long and winding road ahead for Zogenix, which now likely faces considerable additional development work to eliminate the risk of abuse. And analysts were caustic as the company's share price skidded to $1.30. Oppenheimer and Stifel Nicolaus both downgraded the company today.
"We do not anticipate that Zogenix will receive approval by the March 1, 2013 review date, with potential approval likely delayed until abuse risks are mitigated," Oppenheimer's Christopher Holterhoff noted, according to Reuters.