On Friday, I chastised Pfizer (NYSE: PFE) for not giving more information about the Food and Drug Administration's rejection of its abuse-deterrent pain drug, Remoxy. Perhaps investors in Pain Therapeutics (Nasdaq: PTIE) and DURECT (Nasdaq: DRRX) would have rather been kept in the dark.


Price (Decline) June 24

Further Price (Decline) Today

Pain Therapeutics






Source: Yahoo! Finance. Today's decline intraday.

The further decline today comes from Pain's disclosure of further details about the rejection. It turns out that my guess regarding a problem with the manufacturing section of the application was correct, but the possibility that this might be cleared up quickly went right out the window.

The FDA is concerned about inconsistencies between the manufacturing lots of Remoxy. Unfortunately, Pain Therapeutics and friends aren't sure whether it's a problem with the manufacturing directly or just the way they perform the tests on the drug to confirm it was produced correctly.

Given the unknowns about how to solve the problem, Pain Therapeutics doesn't see an approval happening in the next year, and it could take "significantly longer." With that kind of uncertainty, it's hard to recommend Pain Therapeutics as a bad-news buy.

Pfizer still has its recently approved Oxecta, an abuse-resistant pain drug using technology from Acura Pharmaceuticals (Nasdaq: ACUR). But Oxecta is an immediate-release oxycodone, while Remoxy uses extended-release oxycodone for long-term pain sufferers. I'm not sure Acura will benefit from additional sales of Oxecta due to the lack of Remoxy on the market because Purdue Pharma has an approved abuse-deterrent extended-release oxycodone.

The best way to play this news might be to look at DURECT, which contributed its sustained-release technology to make Remoxy. The company has been beaten down but still has quite a few other projects, including phase 3 pain drug Posidur, which uses a different technology. DURECT and partners Hospira (NYSE: HSP) and Nycomed expect to have phase 3 data for Posidur available by the end of the year. Positive results would certainly help investors put the painful memory of Remoxy out of their minds.

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