UPDATE 1-Avanir shares soar on nod for involuntary-emotion drug
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Avanir Pharmaceuticals, Inc.
AVNR.O
$5.03
+2.61+107.85%
3:18pm UTC+0100
Biogen Idec Inc.
BIIB.O
$63.09
+0.38+0.61%
3:17pm UTC+0100
TEVA TA`ASIYOT FARMATSEVTIYOT BE`AM
TEVA.O
$51.33
-0.55-1.06%
3:18pm UTC+0100
Mon Nov 1, 2010 11:28am EDT
* Avanir plans to engage 75 sales reps
* Shares rise as much as 111 pct, touch 3-yr high (Adds details, analyst comments; updates stock movement)
By Krishnakali Sengupta
BANGALORE, Nov 1 (Reuters) - Shares of Avanir Pharmaceuticals Inc (AVNR.O) more than doubled in value Monday after U.S. regulators approved its treatment for a genetic disorder Friday, making it attractive to larger firms looking for a strong product that has cleared the regulatory hurdle.
The U.S. Food and Drug Administration approval makes the drug Nuedexta the first approved treatment for the little known, but not that rare, condition called pseudobulbar affect (PBA) in which patients cannot control outbursts of crying or laughter. [ID:nN29270454].
On a conference call with analysts, the company said it plans to launch the drug in the United States in the first half of 2011 and engage about 75 sales representatives for its marketing.
Canaccord Genuity analyst Ritu Baral, who said Avanir might look for partners in the European markets, expects a "strong launch" in the United States.
Baral, like most analysts, expects the company to go it alone in marketing the treatment in the United States, but look for partners in Europe, where it has yet to be approved.
As of Sept. 30, the company's total cash, cash equivalents and restricted investments were $39.4 million.
Avanir said many interested companies had contacted it even before the drug was approved, and "given the great news on Friday, we would just expect to see that interest increase."
Baral, who expects the drug to reach peak sales after five years of commercialization, said large firms such as Biogen Idec (BIIB.O), Teva Pharmaceutical (TEVA.O) (TEVA.TA) and Novartis AG (NOVN.VX) that focus on central nervous system disorders could find Avanir attractive.
Large pharmaceutical companies are on the lookout for strong ready-to-market or late-stage product as many face an impending patent cliff on several blockbuster products.
Also on Monday, Avanir reiterated that it expects the treatment to cost $3,000-$5,000 annually, but said it would provide further pricing details in November or December.
CLEAN LABEL
"To add icing to the cake, there is no black box warning on Nuedexta's label, which gives Nuedexta no restrictions in its target patient population," Jefferies & Co analyst Andrew Fein said.
A black box warning on the packaging of a prescription drug highlights safety risks
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