What happened

After FDA commissioner Scott Gottlieb asked Endo International to voluntarily remove its long-lasting opioid medication Opana ER from the market, and later issued a statement establishing a steering committee to evaluate ways to curtail the opioid epidemic, shares in Flexion Therapeutics (NASDAQ:FLXN) jumped 18% last month, according to S&P Global Market Intelligence.

So what

A quadrupling in deaths due to opioid abuse since 1999 is leading regulators to seek out new approaches to reducing opioid prescription volume to lower the risk of addiction. Currently, 650,000 prescriptions for opioid medications are dispensed every day, according to the Department of Health and Human Services.

A runner rubs his knee in pain.

Image source: Getty Images.

On June 9, the FDA asked Endo International to halt sales of Opana ER, a powerful long-release medication used to control pain that was being abused by addicts who were turning it into a liquid for injection. Shortly thereafter, commissioner Gottlieb issued a public statement to announce a committee would meet on July 10 and July 11 to discuss whether abuse-deterrent opioid formulations were working in the real-world, and changes that may need to be made to reduce their risk of abuse.

The rising opposition to opioid medication may open a door for Flexion Therapeutics, a company that's developing Zilretta, a quarterly treatment for chronic pain caused by osteoarthritis of the knee.

In trials, Zilretta patients enjoyed a median 50% reduction in knee pain, and, more importantly, that pain relief was maintained throughout a three-month period. Currently, millions of patients receive corticosteroid injections quarterly for their pain, however, the benefit of these shots tends to wear off quickly, and that can lead to the use of rescue pain medications, including opioids.

The FDA has already accepted Zilretta's application for approval, and a decision is expected on October 6. 

Now what

Opioids killed 33,000 people in 2015 and sadly, little progress is being made to reduce that figure. Unlike opioids, Zilretta is comprised of sustained-release microparticles containing a commonly used short-acting corticosteroid. 

If approved, Zilretta could reshape standard of care, and in the process, become a commercial success. About 5 million Americans receive quarterly corticosteroid injections and management is evaluating a cost of $2,000 per year for Zilretta. Clearly, Zilretta wouldn't need to win much market share to make it a 9-figure selling treatment. Investors can also gain clues into Zilretta's commercial opportunity by looking to another injection that's used in this indication: Synvisc-One. Synvisc-One is a hyaluronan injection used to treat knee pain that's made by Sanofi, and its sales clock in around $400 million annually.

Of course, there's no guarantee that Zilretta will get an FDA OK. However, the need for new pain treatments, a recent push for new solutions, and the fact that Zilretta's active ingredient is already on the market as a short-acting corticosteroid,  makes me think the chances of approval are pretty good. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.