It seems kind of ridiculous to me. The Food and Drug Administration made King Pharmaceuticals (NYSE: KG ) wait an extra couple of months to approve its abuse-resistant painkiller, Embeda, but then felt the need to announce the approval while the stock market was open.
Is it really that hard to wait until 4:00 and not require trading to be halted? I understand that the agency is there to serve the public and not investors, but waiting an extra couple of hours really wouldn't make a bit of difference, considering doctors have been waiting years for abuse-resistant painkillers. And, call me paranoid, but yesterday's chart sure makes it look like someone knew about the approval before trading was stopped.
Even if the agency needs to show a little restraint, it's not like King is going to complain. An approval is an approval and this one helps justify its $1.6 billion purchase of Alpharma, which gave it Embeda.
Embeda is the first in a series of abuse-resistant pain drugs that companies are hoping to win approval for. King -- and especially its smaller partners, Pain Therapeutics (Nasdaq: PTIE ) and DURECT (Nasdaq: DRRX ) -- were hoping to be the first last December, but the agency turned down their request to approve Remoxy, and the resubmission won't be made until the middle of next year.
Embeda is a combination of extended-release morphine and naltrexone, which counteracts the morphine. When taken normally, the morphine releases slowly and the naltrexone passes through the patient. But if someone crushes or chews the drug to release the morphine all at once, the naltrexone should counteract the morphine and reduce the euphoric effects.
Now that it's approved, we get to see how much of the market Embeda can capture. It seems unlikely that a doctor would prescribe it to a young patient with questionable pain issues wearing a "legalize marijuana" t-shirt. But what about the average patient who the doctor doesn't have any reason to think is selling or abusing drugs? It may be difficult to justify the presumably higher price because generic versions of extended release morphine are available from Endo Pharmaceuticals (Nasdaq: ENDP ) , Watson Pharmaceuticals (NYSE: WPI ) , and others. Embeda may also steal away sales of King's own extended-release morphine drug, Avinza.
Regardless, the approval should boost sales that have been flagging since heart drug Altace went generic.
Will Embeda be king of the painkillers, or is prince or duke more its destiny? Let us know in the comments section below.
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