Troubled Canadian specialty pharma company Valeant ($VRX) has won U.S. approval for a new oral formulation of the previously injectable-only med Relistor for certain forms of constipation in what could push the drug into blockbuster territory.
The FDA gave the green light last night to Relistor (methylnaltrexone bromide) tablets for the treatment of opioid-induced constipation in adults with chronic noncancer pain.
The drug has had a colorful path to this new approval, having been originally approved back in 2008 as an injectable and developed by Progenics Pharmaceuticals ($PGNX).
Three years later, Progenics then licensed the rights to Relistor across most markets to Salix Pharmaceuticals--which was subsequently sold to Valeant in 2015 for just over $11 billion.
Progenics, which was down by more than 8% at close yesterday, jumped 36.6% in after-hours trading on the news. The biotech has previously said an FDA approval would trigger a $50 million milestone payment. Valeant meanwhile was up by just over 4% in after-hours.
Both Salix and Progenics have said the drug could be worth as much as $1 billion in peak sales, but analysts have been less optimistic.
In a note to clients released after the approval, Umer Raffat, a senior analyst at Evercore, saw just $250 million for the whole franchise, with the oral version only bringing in $125 million.
The drug will also need to compete with AstraZeneca ($AZN)/Daiichi’s Movantik (naloxegol) tablets, which was approved by the FDA two years ago, also for opioid-induced constipation in adults with chronic noncancer pain.
AZ was the first to market this type of oral med in this indication, but the therapy area has come with its challenges.
Global Data analysts say doctors and patients aren't too savvy about opioid-induced constipation and thus tend to use OTC constipation remedies rather than seeking out a prescription solution. Astra saw $29 million in sales from the drug last year.
This will be a boost to Valeant, which has endured increasing political and public scrutiny that saw it earlier this year scrap its 2016 guidance, delay its Q4 results, and confirm that it was being investigated by the SEC.
This was on top of longer-term issues, including its admittance of accounting missteps, a congressional drug pricing investigation, and questions regarding its relationship with specialty pharmacy Philidor.
In March, after an extended sick leave, its embattled CEO, J. Michael Pearson, also left the company.
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