On Thursday, Osmotica Pharmaceuticals (NASDAQ:OSMT) -- a small-cap biopharmaceutical company -- announced that the U.S. Food and Drug Administration (FDA) had approved Upneeq, a therapy the company developed for the treatment of acquired blepharoptosis. This approval seems to have investors excited, and it may have been the catalyst for Osmotica's shares soaring on Friday. The company closed the day up by 25.3%.
Acquired blepharoptosis is a condition that affects a patient's upper eyelid. And until now, there were no approved therapies for this disease. According to Osmotica, the market for Upneeq could be very lucrative. The company argues that millions of people have acquired blepharoptosis in the U.S. alone, with many more suffering from this condition in the rest of the world. According to one study, about 11.5% of adults over the age of 50 have acquired blepharoptosis.
According to Osmotica CEO Brian Markison:
This approval marks a critical milestone for Osmotica, as we continue to execute our corporate strategy. Looking ahead, we see Upneeq as a significant growth catalyst and an important opportunity to bring value to our shareholders while addressing a significant unmet medical need with a first-in-class product.
Given the potential market opportunity for Upneeq, it isn't surprising to see investors bidding up shares of Osmotica following the treatment's approval.
Osmotica needed the approval of Upneeq. During the first quarter, the company reported net sales of $47.3 million, which represented a roughly 16% decrease compared to the prior-year quarter. The company's total revenue came in at $48.6 million, compared to the $57.1 million recorded during the first quarter of the fiscal year 2019. The decline in Osmotica's net sales was due to several of its products encountering stiff competition in their respective markets, leading to lower sales volumes.
For instance, net sales of the company's methylphenidate -- a treatment for attention deficit disorder (ADD) -- decreased by 60% year over year during the quarter. What's more, the healthcare company said it expected methylphenidate (and other products) to continue dealing with intense competition moving forward. The approval of Upneeq should help Osmotica keep its sales afloat in the coming quarters.