NEW YORK (TheStreet) -- Titan Pharmaceuticals (TTNP - Get Report) stock is surging by 16% to $3.48 on heavy trading volume on Wednesday morning, after the FDA's Psychopharmacologic Drugs Advisory Committee voted in favor of approving the company's treatment for opioid addiction.
The regulatory committee approved the treatment, known as Probuphine, by a 12 to 5 vote, the San Francisco-based specialty pharmaceutical company said in a statement on Tuesday.
When the FDA reviews the treatment's New Drug Application next month, it will consider the committee's guidance, Titan said.
There are about 2.5 million people in the U.S. who are addicted to opioids, which includes illicit drugs such as heroin and prescription opioids such as oxycodone.
"New treatment options for the millions of patients and their families suffering from opioid addiction are desperately needed, and we appreciate the Committee's comprehensive review of Probuphine," Titan CEO Sunil Bhonsle said in a statement. "Probuphine has the potential to be the first marketed product to provide maintenance treatment of opioid addiction continuously for six months following a single procedure.
So far today, 1.65 million shares of Titan have traded, versus its 30-day average of about 177,000 shares.
Separately, recently, 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:
We rate TITAN PHARMACEUTICALS INC as a Sell with a ratings score of E+. This is based on the dominance of unfavorable investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TITAN PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, TITAN PHARMACEUTICALS INC swung to a loss, reporting -$0.28 versus $0.39 in the prior year. For the next year, the market is expecting a contraction of 96.4% in earnings (-$0.54 versus -$0.28).
- 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 352.4% when compared to the same quarter one year ago, falling from $0.72 million to -$1.81 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, TITAN PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to -$1.76 million or 26.30% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The gross profit margin for TITAN PHARMACEUTICALS INC is currently extremely low, coming in at 0.00%. Despite the low profit margin, it has increased significantly from the same period last year.
- You can view the full analysis from the report here: TTNP