Zogenix Inc., the drugmaker seeking to bring the first pure hydrocodone painkiller to market, rose the most ever on increased investor expectations of U.S. regulatory approval.
Zogenix climbed 41 percent to $1.70 at the close in New York, the largest single-day increase since the company first sold shares to the public in November 2010. The stock had declined 51 percent in the past 12 months through yesterday.
The Food and Drug Administration said it will miss a March 1 deadline to decide whether to approve the painkiller, called Zohydro, because the agency needs more time to review data, according to a statement yesterday from San Diego-based Zogenix. Analysts at Leerink Swann & Co. and Wells Fargo Securities LLC said the delay indicates the drug probably will be approved.
“The agency could have simply issued a complete response letter (CRL) if it wanted to follow the panel recommendation from last December” to deny the application, Michael Schmidt, a Leerink Swann analyst in New York, wrote in a note to clients.
FDA advisers in December recommended that Zohydro shouldn’t be approved until regulators examined greater measures to curb opioid abuse. The pill would be the first pure hydrocodone painkiller, as opposed to combination treatments like the acetaminophen-mixed Vicodin. The FDA isn’t obligated to follow the recommendations made by advisory panels.
While regulators didn’t provide the company with a reason for the delay, the FDA indicated it may last only several weeks, Zogenix said in the statement. The company said it hadn’t been informed of any deficiencies in its application.
“We continue to believe the odds for eventual approval are high,” Michael Tong, an analyst with Wells Fargo, wrote in a note to clients. “We speculate FDA is dealing with issues of access and potential misuse.”
Zogenix, whose $38 million in 2011 revenue came from its migraine medicine Sumavel, has been counting on Zohydro to increase sales.
Zohydro uses Alkermes Plc’s drug delivery technology to provide extended release of the painkiller. Zogenix and Alkermes, based in Dublin, agreed Nov. 2 that Alkermes would be the exclusive manufacturer and supplier to Zogenix of Zohydro.