NEW YORK (AP) ¿ Wall Street gave a positive nod to King Pharmaceuticals Inc. following Food and Drug Administration approval of the company's abuse-resistant painkiller Embeda. The stock was recently unchanged from Thursday's close at $10.68., but had earlier jumped as much as 4.7 percent, to reach $11.08. On Thursday, the Bristol, Tenn.-based company said the FDA approved Embeda, which is designed to treat moderate to severe chronic pain. Its primary ingredient is morphine, but the pills contain a core of a second drug called naltrexone. If the pill is taken normally, it will release the morphine. However if it is crushed or chewed, the naltrexone is released, canceling out the high from the morphine. King expects to launch the drug in September. It is also developing a second abuse-resistant painkiller, Remoxy, with partner Pain Therapeutics Inc. King asked the FDA to approve the drug in December, but the agency requested more data. King plans to resubmit its application in the middle of 2010. Oxycodone is the active ingredient in OxyContin.
BMO Capital Markets analyst Robert Hazlett reaffirmed a "Market Perform" rating and $10 price target, saying the approval was expected. "Embeda's approval is a positive for King, though it was not the most significant of the abuse resistant opportunities--recently delayed Remoxy was," he said in a note to investors. "This product (Embeda) will likely cannibalize sales from King's already marketed morphine Avinza." Hazlett expects peak annual sales of Embeda to reach $400 million. Collins Stewart analyst Louise Chen reaffirmed a "Buy" rating and raised her price target to $13 from $12, also saying the approval was expected, but positive. "We estimate that this could be a multi-billion dollar opportunity at branded drug prices," she said, in a note to investors.