Shares of Fortress Biotech (NASDAQ:FBIO) soared on Thursday and closed the day's trading session up by 16.7%. The catalyst for these nice gains was a regulatory update from Avenue Therapeutics (NASDAQ:ATXI), a subsidiary of Fortress Biotech.
Back in October, Avenue Therapeutics received a Complete Response Letter (CDL) from the U.S. Food and Drug Administration (FDA) regarding its New Drug Application (NDA) for IV tramadol, a medication intended for the management of acute pain in patients who require an opioid. The FDA's concern was that the drug did not seem safe for its intended target market.
However, Avenue Therapeutics did not give up on IV tramadol. Lucy Lu, the company's CEO, stated the following:
We firmly stand behind the safety data in our NDA and the ultimate approvability of IV tramadol. We will request a meeting with the FDA as soon as possible and are committed to working closely with the agency to resolve these issues in order to bring this important medicine to patients and clinicians in the U.S.
Today, Avenue Therapeutics announced that following a recent meeting with the regulatory agency, it will resubmit an NDA for IV tramadol to the FDA in February 2021, provided there aren't any setbacks related to the ongoing COVID-19 pandemic.
Avenue Therapeutics has a lot riding on this program since the healthcare company currently does not have any products on the market. The biotech's shares soared by as much as 69.4% today and were up by 48% at the end of the day. Given that Avenue Therapeutics is owned by Fortress Biotech, it isn't surprising to see investors also bid up shares of the latter following this news.