Shares of Flexion Therapeutics (FLXN) - Get Report gained more than 11% on Friday after the company said the U.S. Food and Drug Administration has approved an expanded label description for its Zilretta treatment for osteoarthritis knee pain.
Osteoarthritis is the degeneration of joint cartilage and the underlying bone, which causes pain and stiffness, especially in the hip, knee, and thumb joints.
Shares of Flexion gained 11.34%, or $2.18 a share, rising to $21.35 after the company announced that the FDA has approved language for an updated label that will remove wording that said Zilretta was not intended for repeat administration.
It will also include a description of and data from a phase 3 trial of the treatment, along with other information.
“We are very pleased with the new product label as it achieves our primary goal of removing unclear language pertaining to repeat administration, which we believe was potentially confusing to patients, physicians and payers alike," Flexion CEO Michael Clayman said in a statement.
Meantime, Raymond James analyst Elliot Wilbur raised his price target on Flexion to $28 from $25 and reiterated his strong buy rating on the stock, noting in a research note to clients that while unlikely to "significantly alter" the launch trajectory of the drug the news is an all-around positive that should help boost sales.
With the removal of the limitation of use, or LOU, "… we believe physicians should proceed without much hesitation when administering Zilretta repeatedly,” Wilbur said. “More specifically, management had previously alluded that there is a tractable population that will use Zilretta repeatedly once the LOU is removed."
Shares of Flexion have gained almost 70% this year.