NEW YORK (TheStreet) -- Intellipharmaceutics (IPCI) shares are up 9.3% to $3.38 in afternoon trading on Tuesday after the pharmaceutical company said that the FDA granted its abuse deterrent oxcodone drug Rexista fast track status.
Fast track designation mandates the FDA expedite the review process for drugs that treat serious illnesses and demonstrate the potential to address unmet medical needs.
Oxycontin is a popular narcotic pain reliever used to alleviate moderate to severe pain in patients and is an extremely addictive opioid. An abuse-deterent version of the drug would be an attractive alternative for people with prior drug abuse problems.
Last week the company announced plans to accelerate development of Rexista after receiving correspondence from the FDA saying that the company could skip phase III testing of the drug if it can prove bioequivalence to oxycontin.
"We are thrilled with the FDA's positive acknowledgement, which enables us to accelerate the development and commercialization of our abuse deterrent Rexista Oxycodone XR product candidate. The avoidance of a Phase III trial eliminates a significant financial hurdle. More importantly, it shortens the development timeline and potential time to market," said CEO and co-founder Dr. Isa Odidi.
The stock is moving on heavy volume trading today with 3.13 million shares changing hands today, well ahead of its three month daily average of 144,000 shares.
TheStreet Ratings team rates INTELLIPHARMACEUTICS INTL as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTELLIPHARMACEUTICS INTL (IPCI) a SELL. This is driven by several weaknesses, which we believe 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 we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 141.6% when compared to the same quarter one year ago, falling from $2.20 million to -$0.92 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, INTELLIPHARMACEUTICS INTL's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$0.13 million or 158.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of INTELLIPHARMACEUTICS INTL has not done very well: it is down 22.43% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- IPCI, with its very weak revenue results, has greatly underperformed against the industry average of 1.9%. Since the same quarter one year prior, revenues plummeted by 75.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: IPCI Ratings Report