Cadence Pharmaceuticals received a major setback when the U.S. Food and Drug Administration (FDA) asked it to add a “black box” warning to the label of Ofirmev injection.
The “black box” warning will include information regarding doses and the risk of liver injury associated with doses that exceed the recommended daily limit.
We note that Ofirmev is Cadence Pharma’s proprietary intravenous formulation of acetaminophen. It is indicated to relieve pain with adjunctive opioid analgesics as well as for the reduction of fever.
The exclusive rights to Ofirmev in the U.S. and Canada were acquired by Cadence Pharma from Bristol-Myers Squibb (BMY - Analyst Report) in 2006. The drug is marketed by Bristol-Myers as Perfalgan in Europe and other parts of the world.
Ofirmev is Cadence Pharma’s sole approved product and the news of a label warning is a big disappointment for the company. Shares reacted negatively to the news and lost 3.02%. The inclusion of the warning to Ofirmev label will adversely impact sales in the forthcoming quarters.
We remind investors that Cadence Pharma upped its 2013 revenue guidance in Jul 2013 based on strong Ofirmev sales in the first half of 2013. Net revenue for Ofirmev is projected in the range of $103.0 – $105.0 million for 2013, up from the earlier guidance range of $97.0 million – $103.0 million.
However, the company might fall short of its projected range given the inclusion of label warning.
Cadence Pharma currently holds a Zacks Rank #3 (Hold). Right now, Actelion (ALIOF) and ViroPharma Pharmaceuticals look attractive. Both stocks carry a Zacks Rank #1 (Strong Buy).