By Manas Mishra and Ashwin Shyam
(Reuters) – The U.S. Food and Drug Administration declined to approve Pain Therapeutics Inc’s abuse-deterrent opioid treatment Remoxy for the fourth time, sending the company’s shares down 35 percent to a record low.
Remoxy is a capsule formulation of the commonly used opioid oxycodone, and the high-viscosity drug mass helped prevent abuse, according to the company.
However, in a letter to the company the agency said the data failed to show that benefits outweighed the associated risks.
Pain Therapeutics, valued at about $17 million, said it would now initiate a strategic reorganization to focus on its Alzheimer’s disease treatments and diagnostic products.
PTI-125, the company’s lead drug candidate in the Alzheimer’s pipeline, showed positive data in its early-stage study conducted in October.
“They are kind of backed into a corner when their drug gets rejected and there does not seem to be a path forward,” said Kevin Kedra, an analyst at Gabelli & Co, which owns less than 1 percent of Pain shares.
“That’s what companies have to do to stay alive I guess.”
Pain Therapeutics did not mention the scope of the reorganization and said full details would be shared within weeks.
The FDA’s decision comes amid increased public and regulatory scrutiny in the United States over the use of opioid drugs, the abuse of which has reached epidemic proportions.
“This is a bizarre conclusion to reach, especially during a time of staggering human and economic toll created by opioid abuse and addiction,” Pain Therapeutics Chief Executive Officer Remi Barbier said in a statement.
Shares of Durect Corp, which licensed Remoxy to Pain Therapeutics in 2002 and is entitled to milestone payments upon approval of the drug, were down 13.5 percent.
Pain Therapeutics is not the first drugmaker whose reformulated version to deter abuse has hit a roadblock.
“There are lot of unintended consequences from trying to reformulate these drugs if they don’t meet a certain threshold,” said Kedra, pointing to Endo International’s Opana ER, whose reformulated version designed to deter abuse was introduced in 2012.
Endo withdrew the drug from the market last year, about four months after an advisory panel to the FDA concluded that while the rates of nasal abuse associated with Opana fell, rates of intravenous abuse rose.
Pain Therapeutics’ shares were down 35.3 percent at $1.56. They have declined 40 percent this year.
(Reporting by Manas Mishra and Ashwin Shyam in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila)