Endo Pharma Receives CRL - Analyst Blog

Endo Pharmaceuticals' (ENDP) pipeline received a setback when the US Food and Drug Administration (FDA) issued a complete response letter (CRL) to the company regarding the new formulation of Opana ER. The painkiller is designed to resist attempts of crushing, breaking, pulverizing or making a powder of the product. The candidate aims to bring relief to patients suffering from moderate to severe pain and in need of continuous opioid treatment for an extended period of time.

We remind investors that the New Drug Application (NDA) for the new formulation, a semi-synthetic opioid analgesic, was filed on August 2010 and reviewed by the FDA on a priority basis.

Even though the US regulatory body declined to approve the new formulation of Opana ER in its present form, the agency did not ask for additional studies to be conducted. This is good news for Endo Pharma as additional studies would have pushed up the research & development (R&D) costs for the company and delayed the approval even further.

Management at Endo Pharma is confident of addressing the concerns raised by the FDA in the CRL by the middle of the year. Endo Pharma expects a response from the FDA within 6 months of the resubmission of the NDA.

Endo Pharma gained full access to Opana ER through the acquisition of Penwest Pharmaceuticals Co. for approximately $144 million or $5.00 per share in cash late last year. The painkiller was being co-developed by both the companies.

Our Recommendation

Currently, we have a ‘Neutral' stance on the stock in the long-run, which is supported by the Zacks #3 Rank (short-term ‘Hold' recommendation) carried by the company.