IntelliPharmaCeutics Intl Inc. (USA) (NASDAQ:IPCI)
Shares of IntelliPharmaCeutics Intl Inc. (USA) (NASDAQ:IPCI) tumbled 10% in Monday’s trading session to end the day at $2.42 a share. The sell-off came after the U.S. Food and Drug Administration (FDA) raised concerns over the company’s failure to provide data from studies testing the abuse potential of its opioid painkiller Rexista.
FDA’s Rexista Concern
The FDA’s action stems from growing concerns over a wave of opioid abuse and overdoses that are becoming a national healthcare crisis. Most of these treatments normally treat chronic pain that persists even with the application of other forms of therapy. The agency is now requiring the likes of IntelliPharmaCeutics Intl Inc. (USA) (NASDAQ:IPCI) to prove their drugs are designed to discourage abuse.
Rexista is developed as an abuse-deterrent version of Purdue Pharma’s OxyContin which also boasts of tamper resistance properties. The opioid contains a blue dye that is emitted whenever the tablet is tampered with or crushed
During the second quarter earnings report, IntelliPharmaCeutics Intl Inc. (USA) (NASDAQ:IPCI) warned that there can be no assurances that the FDA will approve the NDA application of Rexista. Chances are also reportedly high that the company might be asked to carry out additional studies on the opioid.
Q2 Earnings Report
Separately, IntelliPharmaCeutics Intl Inc. (USA) (NASDAQ:IPCI) reported a second quarter net loss of (-$1.8) million compared to a net loss of (-$2) million reported last year. A decrease in net loss, according to the company, was due to an increase in licensing revenues from the sales of generic Focalin XE.
Revenues in the quarter more than tripled to highs of $2 million from $0.6 million reported for the corresponding period last year. The increase was primarily due to the launch of generic Focalin XR capsules.
Research & Development expenditure was up by $1.2 million compared to last year, attributed to higher stock compensation expense. Selling & General Expenses dropped to $0.8 million from $0.9 million due to a decrease in professional fees and wages.
During the quarter, IntelliPharmaCeutics Intl Inc. (USA) (NASDAQ:IPCI) secured FDA approval for all strengths of Seroquel. However, the company has warned that there are no assurances that the product will generate significant revenues.
“We are pleased with the recent progress made on both the generic and NDA initiatives, having demonstrated our manufacturing capability in respect of generic Seroquel XR®, and the FDA scheduling of the Advisory Committees meeting to review our Rexista™ NDA candidate,” said Dr. Isa Odidi IntelliPharmaCeutics Intl Inc. (USA) (NASDAQ:IPCI) CEO.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.