Most people usually don't associate pain with treats, but investors in shares of Pain Therapeutics (Nasdaq: PTIE) may feel that they're getting a treat next year, when the small specialty pharmaceutical company releases phase 3 trial results for its lead drug.
Pain Therapeutics is focused on developing improved versions of chronic-pain medications. Its lead drug candidate, named Remoxy, is being tested as a more abuse-resistant form of the blockbuster chronic-pain medication Oxycontin.
The chronic-pain market needs such drugs, because addicts looking to get high often abuse these medications. When crushed or dissolved in a liquid, oxycodone provides abusers with a nearly instant euphoric high. Emergency-room visits for oxycodone overdose averaged a 90% compound annual growth rate from 1998 to 2002.
Remoxy acts as a non-dissolvable, non-crushable form of oxycodone that is extremely difficult to misuse. Doctors won't mind prescribing Remoxy over regular oxycodone, because it will help indemnify them against undue scrutiny from the U.S. Drug Enforcement Agency, which has been increasingly taking a closer look at doctors' oxycodone-prescribing habits.
Anyone doubting the market for abuse-resistant drugs needs only to look at the commercialization deal that Pain Therapeutics signed with King Pharmaceuticals (NYSE: KG) late last year. The deal includes more than $400 million in development and milestone payments if the drug can successfully be brought to market.
Speaking of which, the best part of the Remoxy story is that its phase 3 trial is as close to a lock for success as is possible in the pharmaceutical sector. Pain Therapeutics has what is called a special protocol assessment with the FDA; if the trial results are positive, the drug most likely will be approved. Since Remoxy contains the same active ingredient as the already approved Oxycontin, and the phase 3 trial is testing the ability of Remoxy to relieve pain versus placebo, there is minimal chance that the trial will fail.
There have been several lively debates on the Rule Breakers discussion boards about how strong the market for abuse-resistant drugs will be. If there isn't a market for Remoxy, this Halloween treat could easily turn into a nasty trick. But the success of other companies like New River Pharmaceuticals (Nasdaq: NRPH) in developing abuse-resistant drugs gives me comfort in placing my bet that there will be a market for these types of drugs. This is one piece of Halloween candy you don't want to pass up.
Interested in investing in biotechnology? Try
Motley Fool Rule Breakers
free for 30 days to get analyst
Charly Travers'
take on the industry.
Fool contributor Brian Lawler owns shares of Pain Therapeutics.
The Motley Ghoul's Tricks or Treats represents the opinions of each Fool only and should in no way be taken as the opinion of either The Motley Fool, Inc., or any company in question, or as representative of anyone or anything other than that specific Fool's thoughts. So do your homework, and review The Motley Fool's disclosure policy.
Terms & Conditions
RSS Headlines
Fool UK