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Emergent Biosciences (EBS) Surges 28% in a Week: Here's Why
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Since the past week, shares of Emergent Biosciences (EBS - Free Report) have surged 27.9% compared with the industry’s 0.1% growth.
Image Source: Zacks Investment Research
The main reason for this surge is the FDA’s recent approval of the company’s supplemental New Drug Application (sNDA), which sought a prescription-to-over-the-counter switch for its opioid overdose reversal drug Narcan (naxolone) nasal spray (“Narcan”).
Following this approval, Narcan is now the first and currently the only naloxone nasal spray available for opioid overdose available in the U.S. market without a prescription. The medication, which will be made available later this summer, will be sold directly to consumers in drug stores, convenience stores, grocery stores, gas stations and online stores.
The OTC Narcan product will have the same formulation and device design as the original prescription product. Other formulations and dosages of the product will remain available to patients with a prescription. The nasal spray product was initially launched by Emergent in 2016.
Emergent sought this FDA filing for Narcan a month after the FDA issued a notice encouraging drug-makers to apply for OTC naxolone products last November. Per the regulatory body, naxolone can counter opioid overdose effects, reducing deaths pertaining to opioid overdose, especially when given within minutes of the first signs of an overdose.
The U.S. has faced an opioid overdose pandemic for the past few years. Per management estimates, a person dies from an opioid overdose almost every eight minutes.
The approval of Narcan gives Emergent Biosciences a first-mover advantage in the market. Narcan’s product sales have been declining due to erosion in sales following the launch of generic versions of branded Narcan by Teva Pharmaceuticals (TEVA - Free Report) and Novartis’ (NVS - Free Report) generic arm, Sandoz, in December 2021. Being the first to gain approval for an OTC Narcan, the product sales are expected to drive Narcan sales in future quarters. For 2023, management expects Narcan product sales between the $290-$310 million range, based on the approval.
In June 2020, Emergent received an unfavorable decision from a district court on a patent for Narcan nasal spray. The district court, in its decision, favored defendant Teva Pharmaceuticals to launch its own Narcan generic. Teva commercially launched its generic version last year in December. Emergent granted a license to Novartis’ Sandoz in December 2021 to commercialize an authorized generic of Narcan. Teva Pharmaceuticals and Novartis launched their respective generic versions of Narcan on the same day (Dec 22, 2021) in the United States. Other than Narcan, there are several other branded nasal spray products that compete in the same segment, such as Kloxxado, developed by Hikma Pharmaceuticals.
In the past 60 days, estimates for CRISPR Therapeutics’ 2023 loss per share have narrowed from $8.21 to $7.35. Shares of CRISPR Therapeutics have risen 11.3% in the year-to-date period.
Earnings of CRISPR Therapeutics beat estimates in two of the last four quarters while missing the mark on the other two occasions, witnessing an earnings surprise of 3.19%, on average. In the last reported quarter, CRISPR Therapeutics’ earnings beat estimates by 39.22%.
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Emergent Biosciences (EBS) Surges 28% in a Week: Here's Why
Since the past week, shares of Emergent Biosciences (EBS - Free Report) have surged 27.9% compared with the industry’s 0.1% growth.
Image Source: Zacks Investment Research
The main reason for this surge is the FDA’s recent approval of the company’s supplemental New Drug Application (sNDA), which sought a prescription-to-over-the-counter switch for its opioid overdose reversal drug Narcan (naxolone) nasal spray (“Narcan”).
Following this approval, Narcan is now the first and currently the only naloxone nasal spray available for opioid overdose available in the U.S. market without a prescription. The medication, which will be made available later this summer, will be sold directly to consumers in drug stores, convenience stores, grocery stores, gas stations and online stores.
The OTC Narcan product will have the same formulation and device design as the original prescription product. Other formulations and dosages of the product will remain available to patients with a prescription. The nasal spray product was initially launched by Emergent in 2016.
Emergent sought this FDA filing for Narcan a month after the FDA issued a notice encouraging drug-makers to apply for OTC naxolone products last November. Per the regulatory body, naxolone can counter opioid overdose effects, reducing deaths pertaining to opioid overdose, especially when given within minutes of the first signs of an overdose.
The U.S. has faced an opioid overdose pandemic for the past few years. Per management estimates, a person dies from an opioid overdose almost every eight minutes.
The approval of Narcan gives Emergent Biosciences a first-mover advantage in the market. Narcan’s product sales have been declining due to erosion in sales following the launch of generic versions of branded Narcan by Teva Pharmaceuticals (TEVA - Free Report) and Novartis’ (NVS - Free Report) generic arm, Sandoz, in December 2021. Being the first to gain approval for an OTC Narcan, the product sales are expected to drive Narcan sales in future quarters. For 2023, management expects Narcan product sales between the $290-$310 million range, based on the approval.
In June 2020, Emergent received an unfavorable decision from a district court on a patent for Narcan nasal spray. The district court, in its decision, favored defendant Teva Pharmaceuticals to launch its own Narcan generic. Teva commercially launched its generic version last year in December. Emergent granted a license to Novartis’ Sandoz in December 2021 to commercialize an authorized generic of Narcan. Teva Pharmaceuticals and Novartis launched their respective generic versions of Narcan on the same day (Dec 22, 2021) in the United States. Other than Narcan, there are several other branded nasal spray products that compete in the same segment, such as Kloxxado, developed by Hikma Pharmaceuticals.
Emergent Biosolutions Inc. Price
Emergent Biosolutions Inc. price | Emergent Biosolutions Inc. Quote
Zacks Rank & Stock to Consider
Emergent currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the overall healthcare sector is CRISPR Therapeutics (CRSP - Free Report) , which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for CRISPR Therapeutics’ 2023 loss per share have narrowed from $8.21 to $7.35. Shares of CRISPR Therapeutics have risen 11.3% in the year-to-date period.
Earnings of CRISPR Therapeutics beat estimates in two of the last four quarters while missing the mark on the other two occasions, witnessing an earnings surprise of 3.19%, on average. In the last reported quarter, CRISPR Therapeutics’ earnings beat estimates by 39.22%.