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Super Painkiller May Be in Trouble

Shares of Zogenix (NASDAQ: ZGNX  ) took an awful 20% haircut today, on news emerging from a potential competitor. Zogenix's new super painkiller, Zohydro, is extremely potent and effective, normally a positive thing for a drug, but an advisory panel overwhelmingly rejected the drug, because of its potential for abuse. Despite the rejection recommendation, the FDA approved the drug, which up until now has had no abuse-resistant alternative.

Now, however, private company Purdue Pharma, best known for making oxycontin, has an abuse-resistant version of Zohydro. The company did the same thing for oxycontin, which kept non-abuse-deterrent generics of the drug off the market.

In this video, Motley Fool health-care analyst David Williamson outlines two major possible concerns from here for Zogenix and its drug. The first is that doctors would be more likely to prescribe Purdue's version of the drug because of the added anti-abuse feature, and the second is that with all of the backlash around Zohydro, the FDA may consider rescinding its approval of the drug. Zogenix's stock has seen a huge run, but with its fate now partially out of its hands, David sees this as a stock to avoid.

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  • Report this Comment On March 12, 2014, at 7:50 PM, pharma0guy wrote:

    Has anyone considered that this is just a bought and paid for media campaign that is much ado about nothing? The FDA rightly approved the drug because of safety and efficacy data, as the FDA is supposed to do. The advisory panel over-stepped its authority to advise on safety and efficacy and ventured into the morass of public policy. Now those commercial interests whose ox is being gored and paying off the media to publish irrelevant articles about the drug being taken off the market. Has anyone bothered to consider that Zohydro has market exclusivity under Hatch Waxman for 3 years and patent protection until late 2019? Read the Orange Book. I guess if you outsource your due diligence to the media you get caught up in media sensationalist irrelevance to drive ad dollars, like this fake story.

  • Report this Comment On March 12, 2014, at 8:37 PM, pharma01 wrote:

    I completely agree with pharma0guy. Yesterday CNBC was pumping zgnx and next day pre- market article about Purdue LA hydrocodone. Total scam was planned to steal retail stocks. On top of that articles like this one deprived of facts to fool retail investors.

    Author never bothered to collect facts from orange book.

  • Report this Comment On March 13, 2014, at 10:33 AM, efr wrote:

    Maybe it is (supposedly) in trouble because Sen Manchin (WV) has a daughter that is a CEO of Mylan who makes a somewhat competing product, and he is fighting the FDA over it's approval, trying to get it recalled. Convenient.

  • Report this Comment On March 13, 2014, at 11:42 AM, iceironman wrote:

    Please follow this hit piece up with the fact that your terms "FDA may consider rescinding its approval of the drug." It clearly is not, and was stated as such in the below link.

  • Report this Comment On March 20, 2014, at 6:59 PM, gnebee4 wrote:

    A message from the CEO of Zogenix to our stakeholders:

    An increasing number of news reports have been including false and misleading statements about our company and our product, Zohydro™ ER (hydrocodone bitartrate) extended-release capsules (CII), the first and only extended release hydrocodone product without acetaminophen.

    This misinformation has created negative perceptions about Zohydro ER, which was approved by the FDA in October 2013 for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. Up to 2.4 million patients who are currently taking immediate-release hydrocodone with acetaminophen for management of their severe chronic pain may be at risk for liver damage due to acetaminophen, which can be fatal or require a liver transplant. Zohydro ER serves as an important option for those patients, as well as providing an alternative option for severe chronic pain patients who have developed opioid tolerance, are not getting optimum pain relief or are experiencing side effects with other long-acting opioids.

    Critics of Zohydro ER have claimed that this treatment is 10 times stronger than other opioids, 10 times more “lethal” than other hydrocodone prescription drugs (none of which are extended-release formulations), and that this is the strongest opioid available. All are gross misstatements and fail to consider each of the very different FDA-approved indications of each product and do not acknowledge that these products are used to treat a different severity of pain as reflected by their individual prescribing labels. The fact is, there are other extended-release opioids which are of higher strengths than Zohydro ER. For example, the highest dosage unit of extended-release oxycodone is 80 mg and the highest dosage unit of extended-release morphine is 200 mg, both of which are substantially higher than the highest dosage unit of Zohydro ER (which ranges from 10 mg to 50 mg).

    In reality, any drug that is not used as prescribed presents a danger to the person abusing the medicine. That is why we have taken extraordinary steps to support the appropriate use of Zohydro ER through a comprehensive set of industry-leading safeguards. Before we even launched Zohydro ER, we established an External Safe Use Board of experts, including pain management, addiction and law enforcement specialists, who will independently evaluate surveillance data which will be continually shared with our Board of Directors and the FDA.

    In addition, unlike other pharmaceutical companies, we compensate our sales team not on sales of Zohydro ER, but on their educational efforts and utilization of educational resources by prescribers, pharmacists and patients. We also provide access to free locking pill bottle caps and discounted safe-storage units to support appropriate use of Zohydro ER within the home.

    We further would like to note that without justification, inaccurate allegations have been made that Zogenix paid a university to arrange meetings with the FDA to secure approval of Zohydro ER. The university in question has declared for the record that, in the meetings it arranged with FDA officials, no representation from Zogenix was present, nor was the company or its products ever discussed. In fact, Zogenix did not even exist as a company at the time of these meetings.

    On behalf of severe chronic pain sufferers who will potentially benefit from Zohydro ER, we will continue to move aggressively to correct these false and misleading statements. The plight of people living with severe chronic pain should not be politicized. We encourage representatives of the news media who are reporting on Zohydro ER to contact us directly and we will gladly share the facts.

    Roger Hawley

    Chief Executive Officer

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David Williamson

The Motley Fool's Healthcare Analyst, I specialize in Pharma, Biotech, and how the ACA (Obamacare) is changing the business of healthcare in America. Follow me on Twitter for breaking stock news, policy thoughts, and misc musings...

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