Jazz Pharmaceuticals plc (JAZZ - Free Report) announced that the European Medicines Agency's (“EMA”) Committee for Medicinal Products for Human Use (“CHMP”) has adopted a positive opinion recommending approval of its new sleep drug, Sunosi (solriamfetol). The company had submitted a marketing authorization application with the EMA in December 2018 seeking approval for Sunosi to improve wakefulness and reduce excessive daytime sleepiness (“EDS”) in adults with narcolepsy (with or without cataplexy) or obstructive sleep apnea (“OSA”), whose EDS has not been satisfactorily treated by primary OSA therapy.
The positive CHMP opinion was based on positive data from four clinical studies, including the TONES study which has demonstrated the superiority of Sunosi over placebo.
Notably, Sunosi was approved by the FDA in March 2019 to improve wakefulness and reduce EDS in adult patients with narcolepsy or OSA. The drug is commercially available in the United States in two doses — 75 mg and 150 mg tablets.
The European Commission generally considers the CHMP recommendation while approving a drug but isn’t bound by it. Meanwhile, we are yet to get a clear picture from the early launch phase of the drug in the United States. We note that Jazz’s blockbuster sleep drug, Xyrem, is also approved for a similar indication.
Jazz’s shares have gained 11.8% so far this year compared with the industry’s growth of 6%.
We note that the U.S. Drug Enforcement Agency has designated Sunosi as a Schedule IV medicine. The designation is given to drugs composed of controlled substances or chemicals, based on their potential for abuse. Meanwhile, Xyrem is a Schedule III controlled substance, a higher restriction level than Sunosi. The distribution of Xyrem is restricted to a single pharmacy under the FDA’s risk evaluation and mitigation strategy. A lower abuse potential for Sunosi may lead to the mitigation of the risk of dependence on a single pharmacy for distribution, leading to wider access to patients.
Moreover, Xyrem will start facing generic competition as early as 2023. Successful commercialization of Sunosi may help the company offset the loss in Xyrem sales. We remind investors that the company is also developing a Xyrem follow-on product with low sodium content in late-stage studies for EDS and cataplexy in narcolepsy patients.
Meanwhile, competition is increasing for Jazz as several companies are developing or marketing treatments for narcolepsy. Approved drugs for narcolepsy include Teva Pharma’s (TEVA - Free Report) Provigil and Novartis’ (NVS - Free Report) Ritalin-SR. Avadel Pharmaceuticals plc (AVDL - Free Report) is developing a narcolepsy candidate.
Jazz currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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