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Pain Therapeutics Inc.’s (PTIE - Snapshot Report) shares plunged 51.3% after the company announced that the FDA has issued a complete response letter (CRL) for the new drug application (NDA) for its lead candidate Remoxy ER (oxycodone capsules). The company was looking to get Remoxy approved for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment, for which alternative treatment options are inadequate. Overall, the company’s shares have declined 56.4%.
The FDA said that Remoxy cannot be approved in its present form. In the CRL, the agency has asked the company to conduct additional studies that are required to gain approval for Remoxy, with label claims on three routes of abuse (injection, inhalation and snorting).
The company had also sought for a label claim against abuse by chewing. In its CRL, the FDA asked company to submit a revised label proposal for the claim.
However, the company confirmed that the FDA did not bring up any safety, efficacy, manufacturing, stability, bioequivalence or any other issue that were raised in the previous CRL. We remind investors that this is the third time that the FDA has issued a CRL for Remoxy.
Pain Therapeutics said that it is currently evaluating the CRL and intends to hold further discussions with the regulatory body. The company said that the additional actions requisitioned by the FDA in the CRL may take approximately a year to conduct and cost the company about $5 million.

The CRL is a huge setback for the company as it is highly dependent on Remoxy for growth and has no approved product in its portfolio. A positive response from the agency would have enabled the company to launch its first drug.

Zacks Rank & Key Picks

Pain Therapeutics currently carries a Zacks Rank #2 (Buy). Some other favorably placed stocks in health care sector include Anika Therapeutics Inc (ANIK - Snapshot Report) , ANI Pharmaceuticals, Inc. (ANIP - Snapshot Report) and Abbott Laboratories (ABT - Analyst Report) . All the three stocks sport a a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika Therapeutics’ earnings estimates for 2016 and 2017 were up a respective 12.6% and 14% over the last 60 days. The company has recorded a positive earnings surprise in each of the last four quarters with an average beat of 42.19%. Its share price has jumped 22% year to date.
ANI Pharmaceuticals witnessed an increase of 9.5% and 4.7% in its earnings estimates for 2016 and 2017, respectively, in the last 60 days. It has beaten earnings estimates twice in the last four quarters, bringing the average positive surprise to 46.85%. The company’s share price has surged 54.8% year to date.
Corcept Therapeutics’ earnings estimates for 2016 and 2017 were up 25% and 12.5%, respectively, over the past 60 days. Share price of the company have soared 40.5% year to date.

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