Javelin Pain Drug Filing Faces Delay

Drug developer Javelin Pharmaceuticals Inc. said Friday it will conduct an additional study on its pain drug candidate PMI-150, increasing the timeline and costs for an application with the Food and Drug Administration.

The FDA requested the additional study in a meeting with the company last month. The drug is a nasal formulation of the anesthetic Ketamin.

"This additional pre-submission study will extend the timeline and cost for filing our initial NDA (filing) but it is unclear, whether this study will result in an increase, no change, or actual reduction in the overall cost and time to establish a broader acute pain indication," the company said.

Javelin made the announcement at its annual analyst and institutional investor meeting Thursday, sending shares 25 cents, or 5.7 percent, lower to $4.15 in morning trading Friday. The stock has traded between $3.31 and $7.60 per share over the past 52 weeks.

Analysts were mixed on the long-term impact of the extra study and regulatory delay. Leerink Swann & Co. analyst Gary Nachman reaffirmed an "Outperform" rating on Javelin, saying the PMI-150 program is "still very much alive," but riskier because of the additional study.

"In addition, there will be incremental costs to bring intranasal ketamine to market, and Javelin has a limited amount of cash," he wrote in a note to investors.

Meanwhile, Pacific Growth Equities analyst Patricia L. Bank reaffirmed a "Buy" rating, downplaying the delay's impact on the company.

"While we think the Ketamine setback may be somewhat damaging to management's credibility, we do not expect it to significantly impact our valuation of the stock," she said in a note to investors.

The company also announced positive data from a late-stage study of its pain drug Dyloject, which is aimed at treating patients recovering from abdominal surgery. That drug is already approved in the U.K.