The results are not surprising, since this drug candidate is an improved version of Pfizer's
Despite current optimism in the shares of Xenoport, it may be getting ahead of itself with a market cap now exceeding $1 billion -- a fourfold increase since its IPO debut about two years ago. It remains to be seen whether XP13512 will capture leading market share, if or when the drug is ultimately approved, given that gabapentin will provide a cheaper alternative for pharmacy benefit managers.
Since many medication treatment decisions are now made based largely on cost savings, assuming similar safety and effectiveness profiles, I would like to see a direct comparison of XP13512 versus gabapentin in clinical trials instead of just comparing it with a placebo. Two ongoing phase 3 trials of the drug by Xenoport also compare the drug with placebo, and full results from the recently announced study will be presented later this year at a medical conference.
However, with just less than five bucks a share in cash, virtually zero debt, potential future milestone payments of $565 million, and the possibility of future royalties from GlaxoSmithKline