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What happened

After reporting that its Bendeka has received a unique J-code from the Centers for Medicare and Medicaid Services, or CMS, Eagle Pharmaceuticals' (NASDAQ:EGRX) shares are soaring 21.6% as of 12:00 p.m. EDT today. 

So what

Bendeka is a rapid-acting formulation of Teva Pharmaceutical's (NYSE:TEVA) Treanda, a drug commonly used to treat patients with chronic lymphocytic leukemia and indolent B-cell non-Hodgkin lymphoma. 

Teva Pharmaceutical licensed Bendeka last year for $30 million upfront, up to $90 million in milestone payments and royalties on sales. Teva Pharmaceutical also launched Bendeka commercially earlier this year.

So far, Bendeka has achieved 80% of Treanda's market share. However, until now, Bendeka was being reimbursed under Treanda's code, causing investors to worry that a future launch of Treanda generics could crimp Bendeka's market opportunity. The CMS removed that overhang today when they issued Bendeka its own unique code.

Now what

Eagle Pharmaceuticals and Teva Pharmaceutical are targeting for Bendeka to achieve 90% of Treanda's market share, and Q2 sales suggest there's little reason to doubt that will happen. In Q2, Teva Pharmaceutical's Bendeka sales were $146 million. 

Assuming Bendeka continues generating sales at these levels or higher, it will be a significant driver of Eagle Pharmaceuticals' financials (and its share price) for a while. In Q2, Eagle Pharmaceuticals' revenue jumped to $40.9 million from $6 million a year ago because of Bendeka's success. Industry watchers think Eagle Pharmaceuticals' EPS will be $2.80 this year, and that they could climb north of $4 next year.

Since the new J-code provides Eagle Pharmaceuticals with greater revenue clarity, this could be an intriguing stock for growth investors to consider buying on a pullback.

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