Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Zogenix Inc. Stock Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Zogenix (NASDAQ: ZGNX  ) , a specialty pharmaceutical company focused on developing therapies to treat central nervous system disorders and pain, soared higher by as much as 20% after providing an update on the development of more abuse-resistant forms of severe pain medication, Zohydro ER.

So what: According to its early morning press release, Zogenix is advancing two forms of abuse-resistant Zohydro ER formulations. It's doing so because physicians and investors have been concerned about the severe paid medications' potential for abuse in its currently approved formulation. Zogenix notes that it intends to file a supplemental new drug application for its extended release capsules in October 2014 which could be on pharmacy shelves by early 2015 if all goes well. This would reduce instances of abuse by injection or nasal administration.

In addition, Zogenix also selected the final tablet formulation with the assistance of collaborator Altus Formulation. This tablet formulation should reduce injection and nasal administration abuse, as well as oral ingestion abuse potential. Zogenix is aiming to file a supplemental new drug application for its abuse-resistant Zohyrdo ER tablet in the first-half of 2016.

Now what: It's good to see Zogenix being so proactive about its lead drug considering the readily apparent abuse concerns. If Zogenix is able to successfully bring both formulations to market then I believe shares could eventually head higher, especially considering that so few pain meds in tablet form are truly classified by the FDA as "abuse resistant." However, investors would also be wise to consider the fact that pain management is one of the most crowded indication fields, so success isn't a given, and Zohydro ER tablets aren't likely to make it to pharmacy shelves any time before late 2016. For Zogenix this likely means ongoing losses and tight cost controls until these sNDA's are filed.

Zogenix shares may have soared, but keeping up with this recent top pick of Warren Buffett's could prove impossible! 
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour (That's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new free Motley Fool report details this company that already has over 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3016557, ~/Articles/ArticleHandler.aspx, 8/30/2015 8:15:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
ZGNX $18.41 Up +1.35 +7.91%
Zogenix, Inc. CAPS Rating: ***