Pain management is a classic problem -- photo courtesy of WebMD
Last week the NY DAILY NEWS warned its readers of the potential dangers of advanced opioid drugs that are designed and clinically tested for pain relief — but potentially open to the kind of rampant drug abuse that has plagued some providers of opioid pain relief drugs in the past (like Oxycontin). For that article, click here: http://articles.nydailynews.com/2012-01-07/news/30603028_1_oxycontin-prescription-drug-abuse-new-pain-pill. Then the same theme popped up Saturday in Everyday Health: http://www.everydayhealth.com/pain-management/will-the-new-hydrocodone-super-drugs-be-a-magnet-for-abuse.aspx?xid=aol_eh-pain_6_20120109_&aolcat=ESO&icid=maing-grid10%7Chtmlws-main-bb%7Cdl8%7Csec3_lnk1%26pLid%3D127515.
The abatement of pain is not only a humane science that provides merciful surcease for cancer sufferers, terminal patients, burn victims and others with unbearable pain — it is big business, accounting for more than $8 billion annually in the US alone. That means it is a potential pot of gold for drug developers, and it may be worthwhile to have a brief look at some of the up-and-coming contenders. Keep in mind that most of the “big” drugs are sold by gigantic pharmaceutical companies that are outside the purview of this blog — we’ll be looking at smaller drug developers who are most likely going to license their drugs to the Wyeths and Abbotts and Pfizers of the world.
Parsippany NJ-based Pacira Pharmaceuticals (Nasdaq: PCRX; http://www.pacira.com/) might be a good place to start a survey. With a market cap of about $193 million, PCRX shares are around $8, at the low end of a 52-week spread of $6-$15, but with solid average volume of about 300,000 shares per day — so it’s safe to say it is not an unknown stock. Their entry in this field is EXPAREL, a long-acting non-opioid post-surgical pain drug that the developer feels may help reduce the industry’s dependence on opioids. 2012 is a big year for EXPAREL, with product projected to be shipped for the first time in April.
Tarrytown NY-based Progenix Pharmaceuticals (Nasdaq: PGNX; http://www.progenics.com/) is worth looking at as well, although strictly speaking they are on the sidelines of painkilling. Their RELISTOR subcutaneous injection, however, was developed to alleviate one of the pernicious side effects of opioid painkillers — killer constipation. RELISTOR is partnered with Salix Pharmaceuticals virtually worldwide, and PGNX is also working on HIV, and various kinds of cancer drugs including a monoclonal antibody targeting prostate cancer. PGNX has a market cap of just under $300 million, with a stock selling for about $8.50, virtually at its 52-week high, on average volume of about 200,000 shares per day.
A less well-known Australian firm, Sydney-based QRx Pharmaceuticals (OTCQX: QRXPY.PK and ASX: QRX; www.qrxpharma.com) may be the dark horse in this race, with its MoxDuo combination of morphine and oxycodone at far smaller doses than other opioid nostrums on the market. QRx is wending its way through the FDA, and the light at the end of that particular tunnel was seen by its new partner for MoxDuo, the Swiss giant, Actavis (like I said, the biggies are the eventual conduit to the market for most big-league drugs). QRX shares trade on the ASX for Australian $1.65 on average volume of about 200,000 shares and for a market cap of about $200 million. For US investors, the ADR trades for $8.61 on low volume — it has 5 Australian shares in 1 ADR, but as a sponsored ADR it can be held in USD at DTC, which is important to many investors in the US. ADRs can be converted back to Australian shares in the twinkling of an eye to be sold in Sydney.
Uppsala, Sweden-based Orexo (Stockholm OMX: ORX; www.orexo.com) has developed a sublingual (under the tongue) tablet of fentanyl for severe cancer pain. That drug has been partnered by ProStrakan Group plc and is was introduced in the US last year. There is no ADR, but the Stockholm shares trade at SEK28.20, or about US$4.04.
San Diego-based Zogenix Inc (Nasdaq: ZGNX; http://www.zogenix.com/) is a company with a medical device for needle-less injections, but also with an oral version of hydrocodone, ZX002, for patients who need constant pain relief and are tolerant of opioids. ZGNX shares are about $2.60, for a market cap of a little over $167 million, and very healthy daily trading of nearly 400,000 shares. As a hybrid device/pharma company it may be more difficult to follow, but may also be worth looking at.
Finally, Cambridge MA-based Zalicus Inc (Nasdaq: ZLCS; http://www.combinatorx.com/), is a somewhat beaten-up microcap with a market cap of about $115 million and a stock priced at $1.15-$1.20 vs a year high of $3.21, but with average daily volume of nearly 1 million shares. ZLCS has some very enthusiastic fans — like this widely ready SeekingAlpha writer: http://seekingalpha.com/article/319339-11-biotech-bets-for-2012?source=yahoo. Its Exalgo is an extended-release version of hydromorphone, an opioid long in use in the US. They are also working on a calcium channel blocker that has captured the imagination of many investors.
Please do your own research; we only write on companies we find interesting. None of these companies is a client and we own none of the stocks.
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