IntelliPharmaCeutics Intl Inc (USA) (NASDAQ:IPCI) just announced the submission of its New Drug Application (NDA) for Rexista, it’s bioequivalent OxyContin product. The application comes a little later than first expected, but it’s now in the bag, and the result could be a game changer for the company. It’s targeting an abuse deterrent approval, and if the agency gives the asset a thumbs up for approval, and couples the approval with an abuse deterrent label, it could attract significant investor attention to IntelliPharmaCeutics. There’s also a strong potential catalyst on a commercialization partner announcement for the drug, meaning at its current valuation of $96 million (and taking into consideration a somewhat muted response to the latest NDA filing, there looks to be some degree of potential for a discount entry.

Here’s what we know, and what we are looking for moving forward.

So, the drug is a bioequivalent version of OxyContin, as mentioned, the latter of which is currently marketed by the privately held Pardue Pharma. Estimates are just that, but analysts believe OxyContin generates somewhere in the region of $2.4 billion annually, and accounts for 99% of the $2.5 billion oxycodone sustained-release market. This is the market that IntelliPharmaCeutics is hoping to target, and that’s why this is such a big deal for the company.

What sets its candidate apart from the current option?

This is the billion-dollar question. IntelliPharmaCeutics has been somewhat discrete about exactly how it expects to go about unseating the big name in the space, other than to say that Rexista is targeting a more all-encompassing spectrum of abuse deterrent properties. We know its proprietary production tech allows for the drug to be taken above-dose, without inducing overdose, or even an increased impact/euphoria, so that’s a major differentiator if the FDA agrees with the data that supports it. We also know that drug s designed to be resistant to abuse when combined with solvents and by nasal inhalation when crushed or powdered. It’s also a once daily product, which is a key differentiator.

All this aside, what are the chances of approval as an alternative to OxyContin?

Well, without factoring in any degree of differentiation on the abuse deterrence side of things, the drug almost looks a shoo-in for approval. The company conducted a host of early stage trials, having been notified by the FDA that if it demonstrated bioequivalence, as defined by FDA standards, it wouldn’t need to put the drug through phase III studies. It did, and it’s on this data that the application rests. IntelliPharmaCeutics sat down with the agency to discuss trial design and definitions before everything kicked off, and then based on these definitions, compared the lowest and highest strengths of Rexista to the same strengths of OxyContin. The results showed that the ratios of the pharmacokinetic metrics, Cmax, AUC0-t and AUC0-f for the drug, when compared to the already approved blockbuster, are within the interval of 80% – 125% that is required by the FDA. Further, and just as importantly, these data came in with a confidence level exceeding 90%.

Basically, the drug works, as defined by having a similar pharmaceutical profile as that which it is trying to unseat.

So, what’s next?

Well, we’re looking for one of two things. The first is the acceptance of the submission by the FDA. It’s a NDA 505(b)(2) submission, which should speed things up a bit, but the agency has a habit of delaying these abuse deterrent bioequivalent submissions, so there’s no guarantee on that. We’re also looking for – and this is a big one – any announcement that the company has found a commercial partner on the drug. A cash injection is going to be needed if IntelliPharmaCeutics wants to maximize this asset’s potential, and the company is actively seeking partners, meaning said injection is likely. The degree to which this injection will improve cash on hand remains to be seen, but at its current market cap, any number in the low double digit millions will serve up a considerable upside revaluation.

Bottom line here is that the company is not without its risks, and it’s product is far from guaranteed approval (and, perhaps more importantly, far from guaranteed abuse deterrent labeling) but at current price there’s plenty of potential rewards if things go to plan, and it can pick up a commercial partner.