Pain Therapeutics (PTIE)

Pain Therapeutics, Inc. is focused on the development of novel treatments for the management of pain and other therapeutic indications. Lead pipeline candidate, Remoxy, an abuse-deterrent version of pain drug oxycodone, should have significant commercial opportunity upon approval due to its ability to reduce the potential of drug abuse / misuse.

While we believe that Remoxy will see significant demand once launched, we are concerned that the candidate may not receive final approval at the upcoming FDA action date of December 10, 2008. Remoxy received a mixed response from an FDA advisory panel recently; we fear that the FDA might require the company to conduct additional studies to establish its abuse-deterrent qualities.

We are also concerned about the possibility of the company facing a patent infringement lawsuit for Remoxy. Moreover, the rest of the company's pipeline is too early stage to get excited about. As such, we downgrade our rating to Sell with a target price of $5.

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