For a company trying to specialize in pain management, King Pharmaceuticals (NYSE:KG) has delivered considerable agony to long-term investors.

Over the past five years, King's stock price has fallen 62%, while the Amex Pharmaceutical Index, of which King is a member, dropped only 34%, and the S&P 500 index fell about 36%.

King is seeking to alleviate investors' pangs by moving from a grab-bag of treatments to an emphasis on pain management. For several years, it has pursued a vigorous strategy of acquisition and collaboration. This coming year will be pivotal to that effort, because the FDA could rule on three experimental pain drugs.

Multiple deals
In late December 2008, King bought Alpharma, granting King access to the experimental Embeda. Touted as an abuse-deterring opioid painkiller, this drug remains under FDA review. The deal also included Alpharma's Flector Patch, which delivers a non-narcotic pain reliever via the skin.

In October 2007, King signed an agreement with Acura Pharmaceuticals (NASDAQ:ACUR) to develop several opioid painkillers, including Acurox, designed to discourage abuse. The companies sent an Acurox application to the FDA in early January; the agency will decide by June 30.

In February 2007, King acquired the extended-release morphine capsule Avinza from Ligand Pharmaceuticals. Last year, Avinza produced $135 million, or about 8.6% of King's revenue.

And since November 2005, King has been working with Pain Therapeutics (NASDAQ:PTIE) to develop what both companies say will be an abuse-resistant form of oxycodone called Remoxy. Last December, the FDA rejected Remoxy. The companies said the agency wants more non-clinical data, adding that they will discuss the application with the FDA.

Also in December, King reported that the FDA was still reviewing Embeda, adding only that it expects a decision in "early 2009." This regulatory uncertainty is likely one reason most analysts remain neutral on the stock.

Uncertain environment
King's strategic shift comes at a difficult time. First, the company must compete against well-established pain-therapy companies including Johnson & Johnson (NYSE:JNJ), Endo Pharmaceuticals (NASDAQ:ENDP), Teva Pharmaceutical Industries (NASDAQ:TEVA), and Purdue Pharma.

Second, King is making its move just as the Food and Drug Administration seeks to clamp down on abuse of opioid painkillers. The agency wants the companies to demonstrate that the benefits of their products outweigh the risks. The first in a series of meetings is scheduled for today.

The FDA's action will cover King's Avinza, and it might affect the agency's review of Embeda and Acurox, and further review of Remoxy, too. However, FDA policy is likely to equally affect makers of brand-name and generic opioid painkillers.This examination of opioid abuse represents a wild card on top of an already uncertain regulatory climate.

Decisive action needed
King's pain-management move illustrates why necessity can be the mother of dealmaking, especially because two major products are in trouble. First, patent expiration is crushing sales of King's former best-seller, the hypertension medication Altace, which has fallen from $646 million in 2007 revenue to $166 million in 2008. Given the nature of generic competition, sales will probably fall further this year.

Second, King recently lost a legal challenge to two patents covering the muscle relaxant Skelaxin, its current best-seller. In January, a federal district court invalidated two patents in a challenge brought by a generic-drug company. King says it will appeal. Skelaxin contributed sales of $446 million in 2008, slightly higher than the previous year; its sales outlook for 2009 remains uncertain as long as the appeal is pending.

Altace and Skelaxin are part of the old King. CEO Markison's new strategy began evolving soon after Mylan (NASDAQ:MYL) withdrew a takeover offer for King in February 2005.

Will the strategy work?
Last week, Markison said that 2008 was a "transformational" year. His comments accompanied King's fourth-quarter report, in which the company produced earnings that beat the Wall Street consensus by a penny.

Since the Alpharma deal closed near the end of December, the fourth quarter hardly reflected this apparently crucial component of King's future. Alpharma provides King not only with more pain treatment opportunities, but also with an animal-health business that should provide a consistent revenue flow.

Give Markison credit for developing a strategy and taking a chance to better coordinate King’s future. However, investors will need a high tolerance for um, pain, this year. If King gets the FDA's OK for the three drugs discussed above, and if they receive friendly labels, Markison's plan will have paid off.

If not, pass the aspirin.

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Fool contributor Robert Steyer doesn't own shares of any companies cited in this article. Johnson & Johnson is an Income Investor selection. The Motley Fool has a disclosure policy.