BACKGROUND: On September 9, Endo and BioDelivery Sciences presented data from a Phase 2 study for the investigational drug buprenorphine HCl buccal film, which is being developed under the proprietary name Belbuca. The findings showed that study participants receiving around-the-clock therapy with an opioid full agonist could be switched to Belbuca, at approximately half the full agonist dose, without increasing the risk of experiencing opioid withdrawal or a loss of pain relief. The drug is currently under review by the FDA for use in patients with pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.
ONE OF ENDO'S MOST IMPORTANT ASSETS: Deutsche Bank analyst Gregg Gilbert noted that Belbuca, which could be approved for moderate-to-severe chronic pain, has its FDA action date coming tomorrow, October 23. Belbuca is a novel formulation of buprenorphine that has potential advantages over opioids, Gilbert told investors in a research note. The analyst, who views the drug as one of Endo's most important pipeline assets, models launch in 2016 with year-five sales of $250M, equating to $7 per share of value in his model. Gilbert keeps a Buy rating on Endo with an $88 price target.
WHAT'S NOTABLE: A number of specialty drugmakers' shares, including those of Endo, were pressured yesterday in the wake of Citron Research's claim that Valeant (VRX) could have committed fraud regarding its relationship with specialty pharmacy Philidor RX. Citing "market speculation and inquiries," Endo provided an update on the company's use of specialty pharmacies, stating that the percentage of the company's projected U.S. Branded 2015 revenues, at the midpoint of 2015 guidance, that flow through specialty pharmacies is less than 10%, which represents approximately 3% of the company's projected overall 2015 revenues at the midpoint of 2015 guidance. The specialty pharmacies used by Endo are fully independent of the company and Endo does not have any ownership interest in, consolidate financial results of or have affiliations with any specialty pharmacy, the company added. A number of other drugmakers, including Allergan (AGN - Get Report) , Akorn (AKRX - Get Report) , Mallinckrodt (MNK - Get Report) and Horizon Pharma (HZNP - Get Report) , also rushed to clarify their usage of specialty pharmacies, or lack thereof, in the wake of the allegations made against Valeant.
PRICE ACTION: Amid the controversy surrounding Valeant yesterday, Endo shares dropped $8.37 to $54.46. Over the last week, Endo shares have declined about 16% and the stock has pulled back by nearly 37% over the last three months.
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