RICHMOND, Calif. (TheStreet) -- U.S. regulators on Wednesday approved a new, quick-dissolving sleeping pill from Transcept Pharmaceuticals (TSPT) aimed at people who wake in the middle of the night but cannot fall back to sleep.
Transcept's Intermezzo is a low-dose formulation of zolpidem, the active ingredient in the popular and now generic sleeping pill Ambien. Unlike most sleeping pills taken at bedtime, Intermezzo is used in the middle of the night and will therefore come with significant restrictions and warnings to minimize the risk that people wake up the next morning still drowsy and drive while impaired.
People taking Intermezzo will be instructed to make sure they have at least four hours of bedtime remaining and to not drive a car for a minimum of five hours after dosing.
Transcept convinced the U.S. Food and Drug Administration to approve Intermezzo after two previous efforts were rejected due to safety concerns with the sleeping pill. Transcept conducted a driving study to demonstrate that people could take Intermezzo in the middle of the night and drive the next day without impairment. The company also lowered the Intermezzo dose for women because of data showing that women take longer to clear the drug from their bloodstream.With Intermezzo approval, Transcept partner Purdue Pharma has 10 days to decide whether it will sell the drug in the U.S. If Purdue opts in, Transcept will receive a royalty on sales plus various milestone payments. Following approval, questions remain whether the new label proposal and instructions for use are "restrictive and have reduced the sales potential for the drug," wrote Zacks analyst Jason Napodano in a recent research note. Napodano sees peak sales of Intermezzo reaching $254 million and has a price target for Transcept of $8 per share. Somaxon Pharmaceuticals (SOMX) won approval and launched a new sleeping pill, Silenor, last year but sales have disappointed due largely to cheap, generic competitors. Transcept shares closed Tuesday at $6.61 but have traded as high as $8.72 in recent weeks. -- Written by Adam Feuerstein in Boston
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV