Yesterday, it was announced the FDA it would extend its review of Flexion Therapeutics (FLXN) application seeking approval for repeat injections of Zilretta in patients with knee pain due to osteoarthritis or OA. The PDUFA date was scheduled for Monday.
Surprisingly, the stock of Flexion gained a tad more than three percent on this announcement in trading Monday in what was a flat day for the biotech sector overall. This is interesting given repeat injections should be a major driver of Zilretta's growth ramp. Obviously, investors think this is going to be just a minor delay and immaterial to the longer term investment case around Flexion.
This news also triggered the first analyst activity in more than two months around FLXN. Northland Securities ($36 price target), Needham ($28 price target) and Benchmark all reiterated Buy ratings on the stock Monday.
Benchmark's analyst said he 'continues to believe the company will get expanded labeling, "just not as rapidly as anticipated." Noting that the FDA has not asked for any additional clinical data and informed the company that it expects to complete the review in "the coming weeks,"
While the FDA action may caused some volatility in the stock during trading this week, we believe a recent bullish article on SeekingAlpha well articulates the reasons to be optimistic around this name over the longer term.
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