Avanir Pharmaceuticals Inc. won U.S. approval for a drug that curbs bouts of uncontrolled laughing or crying in patients with neurological disorders, regulators said. Shares more than doubled in extended trading.
The medicine, Nuedexta, is the first approved to treat patients with multiple sclerosis or Lou Gehrig’s disease who develop symptoms known as pseudobulbar affect that causes loss of emotional control, the Food and Drug Administration said in a statement. Avanir, which has no other products on the market, plans to begin selling the drug in the first three months of 2011, the Aliso Viejo, California, company said in a statement.
The medicine may have sales of $275 million by 2013, said Ritu Baral, an analyst with Canaccord Genuity in New York. She was among four analysts surveyed by Bloomberg with buy ratings on the shares and an average 12-month target price of $9.23.
The approval “marks Avanir’s transition toward becoming a commercial enterprise, ready to support the successful launch of the first FDA-approved treatment for pseudobulbar affect,” Keith Katkin, president and chief executive officer of Avanir, said in the statement.
Avanir gained $2.75, or more than 113 percent, to $5.17 at 7:04 p.m. New York time in extended trading on the Nasdaq Stock Market after closing at $2.42.
“We think Avanir will conduct a strong launch of the drug in the first half of 2011 and that it will gain good uptake by the end of the year,” Baral said today in a telephone interview.
Nuedexta is a combination of quinidine, a generic drug that prevents heart arrhythmia, and dextromethorphan, a cough suppressant. The combination is thought to affect the neurotransmitter glutamate, Avanir has said.
Avanir presented results of a study at the American Academy of Neurology’s annual meeting in Toronto in April showing that patients reported fewer episodes of involuntary laughing and crying after taking the medication
The FDA declined to approve the drug in 2006, citing concerns over heart rhythm safety, said Baral. The agency’s chief concern was whether quinidine caused QT prolongation, a change in electrical rhythm that can increase heart attack risk, she said.
The company then reformulated the drug with a lower dose of quinidine and conducted new studies, she said.
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