NEW YORK (TheStreet) -- Shares of Durect Corp. (DRRX) - Get Report shares were plummeting 31.76% to $1.16 on heavy trading volume late afternoon Monday as the Cupertino, CA-based biopharmaceutical company's licensee Pain Therapeutics (PTIE) received an FDA letter saying its opioid analgesic was not approved.
The FDA told Pain Therapeutics that its new drug application for the opioid analgesic, called REMOXY, demonstrated deficiencies in the drug's abuse deterrence data.
Pain Therapeutics will now need to take additional actions to obtain drug approval, which could take up to a year and cost as much as $5 million, the company said in a statement.
TheStreet's Adam Feuerstein said Pain Therapuetics' CEO Remi Barbier has failed for a decade to secure approval of the company's most important drug.
In 2002, Durect agreed to give the San Francisco-based biopharmaceutical company the right to develop and commercialize REMOXY and other drugs using Durect's extended-release, abuse-deterrent technology, the company said in a statement.
About 10.2 million of the company's shares have changed hands so far today vs. its average volume of 714,827 shares per day.
Pain Therapeutics stock was tumbling 53.48% to $1.27 in late afternoon trading on Monday.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
The team rates Durect as a Sell with a ratings score of D-. This is driven by several weaknesses, which it believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks it covers. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: DRRX