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Jazz Pharmaceuticals' sNDA for Xyrem Gets Priority Review

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Jazz Pharmaceuticals plc (JAZZ - Free Report) announced that the FDA has accepted the supplemental new drug application (sNDA) for narcolepsy drug, Xyrem. The sNDA is seeking label expansion of the drug for the treatment for cataplexy and excessive daytime sleepiness (“EDS”) in pediatric patients. The FDA has granted priority review to the sNDA and a decision is expected by Oct 27, 2018.

The drug is currently approved to treat the same indications in adult patients.

Shares of the company have rallied 29.6% so far this year against the industry's 2.1% decrease.

 

The sNDA included data from long-term phase II/III EXPRESS study evaluating Xyrem in patients aged seven to 17 years. The study was initiated upon request from the FDA. Data showed that Xyrem reduced cataplexy and EDS for up to one year in such patients.

Xyrem is the majority revenue source for the company, generating three-quarters of the total sales. Xyrem’s sales were $316.8 million in the first quarter of 2018. A potential approval in pediatric patients will likely boost sales as the eligible patient population increases.

However, several companies are also developing their candidates for the treatment of cataplexy and EDS in narcolepsy patients including Avadel Pharmaceuticals plc (AVDL - Free Report) . Moreover, a few companies are trying to bring the generic version of Xyrem in the market. Jazz has settled such litigations with some companies including privately-held West-Ward Pharmaceuticals and Par Pharmaceutical, which have restricted a generic entry till Jan 1, 2023.

The entry of either a branded or generic drug is expected to severely impact Jazz’s top line.

Apart from Xyrem, Jazz’s another narcolepsy candidate, JZP-110, is under review for the treatment of EDS. A decision is expected in December.

 

Zacks Rank & Key Picks

Jazz currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks from the same space are Aeglea BioTherapeutics, Inc. and ANI Pharmaceuticals, Inc. (ANIP - Free Report) . Both the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aeglea’s loss per share estimates narrowed from $1.93 to $1.67 for 2018 and from $3.86 to $3.57 for 2019 over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 19.32%. The stock has rallied 101.3% so far this year.

ANI Pharmaceuticals’ earnings per share estimates moved up from $5.54 to $5.70 for 2018 and from $5.72 to $6.15 for 2019 over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 8.69%. The stock has rallied 3.9% so far this year.

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