How Endo's FDA Committee Vote Affects Egalet

“After two days of data presentations, the FDA Advisory Committee voted 18-8 (1 abstention) that the benefits of reformulated, crush-resistant Opana ER no longer outweigh the risks,” Cantor Fitzgerald’s Chiara Russo said in a note.

The analyst maintained an Overweight rating on Egalet Corp (NASDAQ: EGLT), with a price target of $13.

The FDA Decision

The data presented at the FDA’s Advisory Committee on Opana ER, manufactured by Endo International plc - Ordinary Shares (NASDAQ: ENDP), indicated that while the formulation did deter snorting, it increased abuse via injection.

“Some panelists felt the drug should be removed from the market while others suggested a label update,” Russo mentioned. “Given the data limitations and lack of active promotion, we are skeptical that FDA will act to remove the drug from the market.”

The analyst noted that the IV abuse seemed to increase HIV transmission within a certain small geography, along with reports of a rare, although serious, vascular disorder.

Related Link: For Egalet, Clinical Delays Outweigh Solid Q4 And Arymo Launch

What It Means For Egalet

“There is little and limited data, in our opinion, on whether ADFs (Abuse Deterrent Formulations) have the intended effect, either positive or negative, of which EGLT has two, Oxaydo and Arymo,” Russo said.

The analyst pointed out that Egalet already has two products on the market, Oxaydo and Sprix Nasal Spray, although the real value comes from the company’s best-in-class, proprietary Guardian abuse-deterrent technology.

“Their first proprietary product, Arymo, an abuse-deterrent extended release morphine formulation, was approved in January 2017. Within the space that Arymo will play, a small percentage of market share would equate to meaningful revenue for the company,” Russo added.