KemPharm Targets Skyrocket At Research Firms After Positive pK Study

In a report published Friday, Cowen analyst Ken Cacciatore maintained an Outperform rating on KemPharm, Inc. KMPH, while raising the price target from $35 to $55. The company reported positive data for KP201 for the first of two studies. Analyst Ken Cacciatore believes that "KP201 has the potential to achieve a label with best-in-class abuse-deterrent claims", while adding that this was "the most sophisticated/elegant approach available and we believe it will yield significant value from these levels." Study Results The analyst also stated that KP201 was the first immediate release abuse deterrent that showed a difference when taken intranasally and orally in opioid exposure. For the first intranasal human abuse liability study, KemPharma aimed to compare the amount of hydrocodone released when KP01 was snorted with the amount released with generic hydrocodone bitartrate, with the goal of KP201 leading to lower hydrocodone exposure. The study showed that KP201 was effective in decreasing hydrocodone exposure by 82 percent in the first half hour and 63 percent in the first hour and a half, as compared to the generic product. According to the Cowen report, "As a direct result of the decreased exposure through the nose, the time to peak concentration (Tmax) was meaningfully delayed by one hour and a 36 percent decrease in peak hydrocodone exposure (Cmax) was observed." Given that the study met its primary and secondary endpoint, the analyst believes that "KP201 has the potential to achieve a label with best-in-class abuse-deterrent claims." "Once approved with this profile, our consultants believe KP201 could capture significant market share from branded hydrocodone/APAP, along with generic hydrocodone/APAP," Cacciatore added. The analyst also mentioned that any competitor drug candidate would need to meet the benchmark set by KP201, which would provide a further barrier to entry to the abuse deterrent market. Canaccord Analyst Agrees In a report published Friday, Canaccord Genuity analyst John Newman maintained a Buy rating on KemPharm, while raising the price target from $24 to $34, given the positive data from the intranasal pK study for KP201. Additional data is expected in 3Q, while the schedule 3 data showed "KP201 without acetaminophen showed statistically significantly lower Cmax, Tmax, and AUC vs. hydrocodone when both drugs were snorted, suggesting significantly less abuse potential for KP201," Newman stated, while mentioning that this was "a major positive." The company believes that the intranasal abuse study met the endpoints, which should help the KP201 qualify for category 2 abuse deterrence labeling, which in turn would be a major differentiator for the product. According to the Canaccord Genuity report, "We believe that FDA may consider KP201 for schedule 3, allowing easier access vs all other generic hydrocodone combinations, and potentially expanding the commercial opportunity for KP201." In addition, the analyst expects the company to report positive results for the second intranasal abuse study in 3Q15, with KP201 once again demonstrating less favourable pK data and lower drug liking.