The company said in the release it would commercially launch the product this fall.
Cotempla XR-ODT is a federally controlled substance, as it contains methylphenidate, which can be a target for people who abuse prescription medicines or street drugs.
In fact, this was Noes' second attempt for approval, as the drug watchdog issued a complete response letter for the drug in November 2015. Following resubmission of the NDA in December 2016 after the completion the bioequivalence bridging study, the drug managed to pass the FDA muster this time around.
On June 20, however, the stock plummeted on roughly ten times the average volume.
Analyzing Neos
To make sense of the move, Benzinga looked at the company, its fundamentals, its product portfolio, its prospects and competition.
Neos Therapeutics went public in 2015, raising $72 million by offering 4.8 million shares at $15 a piece. The Grand Prairie, Texas-based company touts a mechanism for manufacturing liquids and tablets that deliver the dose in a controlled manner over time.
Neos' ADHD Stable
- Apart from Cotempla, Neos has Adzenys XR-ODT, its version of amphetamine XR-ODT, which was commercially launched in May 2016 after receiving FDA approval on January 27, 2016.
- The company has also submitted a NDA for NT-0201, its amphetamine XR liquid suspension, on November 17, 2016, with a PDUFA goal date of September 15, 2017.
The company says its Adzenys XR-ODT is the first amphetamine XR-ODT and its Cotempla XR-ODT is the first methylphenidate XR-ODT for the treatment of ADHD.
Source: Neos' 10-K Filing
The company generated gross sales of $8.2 million from the sales of Adzenys from its commercial launch date through the end of 2016, having captured 0.1 percent of the overall ADHD market in the fourth quarter of 2016.
In the first quarter of 2017, the drug raked in sales of $3.1 million, accounting for roughly 55 percent of its total revenues.
"Management believes it can leverage the existing ~125 reps and generate considerable synergies, particularly with Cotempla," a BMO note released on May 10 said.
"It will be the only company promoting both amphetamine and methylphenidate products to high-prescribing ADHD physicians in a category with a lot of switches back and forth, and comfortably covering a wide age range."
ADHD Care
Methylphenidate, sold under brand names such as Ritalin and Concerta, and amphetamines like Adderall are the current standard of care for ADHD, although most these drugs are available as large pills, making it difficult to administer then to kids.
According to the recent 10-K filing of Neos, ADHD is a $10.4 billion market.
ADHD is a non-behavioral disorder characterized by a persistent pattern of inattention and/or hyperactivity/impulsivity that interferes with the functioning and/or development.
Stimulant medications such as methylphenidate and amphetamine generated sales of $3.4 billion and $5.7 billion in the U.S. in 2016.
The 10-k filing, quoting a 2006 study, said an estimated 4.4 percent of adults in the U.S. experienced ADHD symptoms. An estimated 11 percent of children in the U.S. aged between 4 and 17 were diagnosed with ADHD in 2011.
The company claims that the majority of currently available dosage forms for ADHD are tablets and capsules and that, up to 54 percent of the pediatric population and 40 percent of the adult population have reported difficulties swallowing these formulations.
The most prescribed ER medications currently are Concerta, Adderall XR and their generic equivalents.
Among the novel delivery options:
- A transdermal methylphenidate patch called Daytrana was developed, which managed to snare 3-percent share of the overall methylphenidate ER market in 2014.
- Liquid formulation of methylphenidate, Quillivant XR was launched by Pfizer Inc. PFE in January 2013. The company followed it up with the launch of a chewable formulation called Quillichew ER in April 2016. Quillivant, according to Neos' 10-K filing, generated gross sales of $192 million in 2016, capturing 0.9 percent share of the ADHD market in the fourth quarter of 2016.
- Tris Pharmaceuticals' ER liquid formulation of amphetamine Dyanavel XR was launched in 2016.
Competition
- Shire PLC (ADR) SHPG's Vyvanse, Adderall XR, Intuniv.
- Johnson & Johnson JNJ unit Janssen's Concerta.
- Eli Lilly and Co LLY's Strattera.
- Pfizer's Quillivant XR and QuilliChew ER.
- Concordia International Corp CXRX's Kapvay.
- Novan, Inc. 's Daytrana.
- Novartis AG (ADR) NVS's Focalin XR and Ritalin LA.
- Tris Pharmaceuticals' Dyanavel XR.
- Rhodes Pharmaceuticals' Aptensio XR.
Neos said the FDA's revised guidance for bioequivalence testing of ER methylphenidate would make it tough for companies seeking approval on the basis for bioequivalence for new generic products. Accordingly, the company believes Cotempla XR-ODT and Concerta would benefit from a lack of competition.
Why Did Neos Slump?
The negative reaction in Neos' stock price could be traced back to the FDA approving Shire's Mydayis, a long-acting therapy for ADHA. Mydayis has the same active ingredient as Shire's Adderall XR, but is formulated to last up to 16 hours as opposed to the 12 hours for Adderall XR.
Shire indicated it would launch the drug by the third quarter of 2017.
Another way of looking at the slide is the run up in the shares of Neos heading into the FDA decision date. Thus, it could be the classic case of Buy the rumor and the sell the news.
Source: Y Charts
All said and done, the ADHD market is crowded, and it requires a real differentiating factor to stand tall among the mushrooming treatment options. Does Neos have an ace up its sleeve?
Neos closed the June 20 session down 11.11 percent at $8. The stock is down 9.37 percent over the last three trading days, while remaining up 23.93 percent year to date.
Related News:© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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