Here’s What’s Moving KemPharm And Puma Biotechnology

KemPharm, Inc. (NASDAQ:KMPH) ran into the end of last week on news related to the company’s lead development program. At the close of trade on Friday, KemPharm shares were going for around six dollars apiece, up more than 13% on the day’s open. Premarket on Monday, shares rose again to $6.35 but have since settled back down to an even $6 once again, still up 27% from Friday.

This one is all about a drug called Apadaz.

The company had been trying to get the asset approved in the US for the short-term management of acute pain and, subsequent to collecting what turned out to be a very robust set of late stage clinical data, submitted a New Drug Application (NDA) to the agency back in September 2017.

And as per the latest development, that NDA has resolved positively – the company has picked up approval for the drug in its target indication.

But it’s not quite as cut and dry as the approval might imply. The company actually submitted this application previously and picked up a rejection from the FDA, based on the opinion that the drug has a high potential for abuse. It’s an opioid asset, after all, and there’s a large and persistent opioid issue in the US right now that many agencies are working to resolve.

One of these agencies is the FDA and the addition of a fresh option on shelves, and a low priced one at that (more on this shortly) is a risky move on the part of those trying to solve the issue. KemPharm recognizes this and, in contrast to it seeking an abuse-deterrent labeling on the first attempt at approval, the company has now settled for what looks likely to be an asset classed as a schedule C-II product, which is defined as a drug with a high potential for abuse.

So why is the company picking up so much strength on a drug approval that didn’t get abuse deterrent labeling?

While it’s not strictly abuse deterrent, there is a degree of differentiation between Apadaz and current branded opioid treatments available right now, and KemPharm believes that this differentiation can help it to sell more than 5 billion pills annually. As was reported at the time of the approval announcement, this will be supported by the company’s efforts to establish either a non-traditional pact with a pharmacy benefit manager or a tie-up with a generic pharmaceutical company.

The drug will also be priced in and around generic pricing, as opposed to in line with the premium pricing that some of the branded assets command, which should help KemPharm to get a running start as and when it rolls out its commercialization strategy.

To put all this another way, KemPharm has picked up an approval for an asset that is going to (based on company expectations) be a low price, high volume seller and it’s this fact that’s helping drive market cap higher right now.

Puma

Puma Biotechnology, Inc. (NASDAQ:PBYI) is also moving at the start of the week, with the company reporting the outcome of a panel meeting that was put in place to discuss its neratinib oncology program.

Unfortunately for shareholders, however, the announcement wasn’t positive as was the case with KemPharm.

Specifically, Puma announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has adopted a negative opinion subsequent to the closing of a panel meeting and, in line with this opinion, is recommending the refusal of the Marketing Authorization Application (MAA) for the drug as relates to  target indication of extended adjuvant treatment of early stage HER2-positive breast cancer.

This isn’t too much of a surprise, with Puma already having reported during the early part of this year (back in January) that it expects a negative outcome, but it’s still causing movement nonetheless. At the initial announcement., shares of Puma dipped as much as 7%, before the company returned to trade at the close a few points up on the day’s open.

There’s a good chance we’ll see a degree of further weakness as markets get underway this morning and the US weighs in on the development.

As things stand, Puma trades for $68.25 a piece.

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