NEW YORK (TheStreet) -- Though Zogenix (ZGNX) made it to the closing bell up 4.56% on the news that the FDA chairwoman had backed the controversial drug, it is losing its gains in extended trading - down 7.9% at 5:00 p.m. EST.
The drop comes in the wake of Sen. Joe Manchin (D-W.Va.) submitting a bill to pull the company's hydrocodone pain killer Zohydro from the market. The senator has been one of the most vocal opponents of the drug, citing its highly addictive, pure hydrocodone content as a cause for concern. Most hydrocodone based pain-killers are mixed with other drugs to decrease their risk of addiction and the senator from West Virgina leads a chorus of lawmakers who would like to see the drug pulled.
Both Manchin and Sen. Charles Schumer (D-N.Y.) sent letters to Health and Human Services Secretary Kathleen Sebelius asking her to force the FDA to reconsider its approval of the drug.
Manchin's bill was filed today just hours after FDA Commissioner Margaret Hamburg defended Zohydro amid blistering questioning from the Senate's Health, Education, Labor and Pensions committee.
TheStreet Ratings team rates ZOGENIX INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ZOGENIX INC (ZGNX) 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 deteriorating net income, disappointing return on equity, poor profit margins, generally high debt management risk and feeble growth in its earnings per share."