Questions on Pain Thera's Remoxy

Pain Therapeutics Inc. (PTIE - Snapshot Report) filed for the approval of its lead pipeline candidate, Remoxy, in June. Remoxy is an abuse-deterrent version of pain drug oxycodone. The product should have significant commercial opportunity upon approval due to its ability to reduce the potential of drug abuse or misuse.

Importantly, the company has a major commercial partnership with King Pharma (KG - Analyst Report) for Remoxy and three other opioid candidates. King should prove to be a strong marketing partner as the company has solid experience in promoting products in the pain management market.

While we believe that Remoxy will see significant demand once launched, our main concern right now is the possibility of the company facing a patent infringement lawsuit for the drug. Pain Therapeutics is confident that Remoxy’s pharmacokinetic data will remove any concerns regarding its intellectual property (IP) position, but we are yet to see this data.

Moreover, the rest of the company’s pipeline is too early stage to get excited about. The company has three drug candidates in clinical programs including, Oxytrex, PTI-202 and a novel radio-labeled monoclonal antibody for the treatment of metastatic melanoma. Pain is also working on a new treatment for patients with hemophilia.

We await more clarity on the situation and believe that concerns regarding Remoxy’s IP position will remain an overhang on the shares. As such, we rate the shares a Hold and see fair value at $9.

Arpita Dutt, CA, contributed to this report.

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