Pain Therapeutics, Inc. (NASDAQ:PTIE) stock soared on Tuesday, soaring as much as 85% higher after a study of the leading drug candidate in its pipeline, Remoxy, revealed that the treatment could be an effective, less-addictive painkiller than other similar drugs.
The future of PTIE stock relies more or less wholly and entirely on the fate of Remoxy, the only drug in the company’s pipeline currently in Phase III clinical testing.
After Phase III testing, a drug must be approved by the Food and Drug Administration (FDA) before going to market.
Today’s announcement comes as welcome news for PTIE stock holders, who’d seen shares fall 61% in the previous year, including a precipitous one-day tumble on Oct. 27, 2014, when Pain Therapeutics stock plunged 53% after a major partner abandoned its endeavor to market and develop Remoxy.
REMOXY Study: Promising, But Not End of PTIE Problems
The partner that PTIE lost in October was Pfizer Inc. (NYSE:PFE), who got sick of plowing money into REMOXY in hopes that it would be FDA approved. Remoxy had been twice rejected by the FDA, and Pfizer was clearly unimpressed by the prospects.
Today’s study is great for PTIE stock, as it claims to demonstrate Remoxy’s use as a painkiller that doesn’t easily lend itself to abuse:
“Nearly 60 subjects completed this study, with an average age of 27 years. The study’s primary objective was to measure the abuse potential of chewed and intact 40mg REMOXY compared to 40mg immediate-release (IR) oxycodone when taken orally. Study subjects were instructed to chew REMOXY capsules vigorously for up to 5 minutes, but none were able to do so in light of REMOXY’s high viscosity, texture or taste.”
If Remoxy is eventually approved and given the abuse-deterrent label claim that Pain Therapeutics wants, PTIE stock owners could be in for another payday. Remoxy’s high viscosity is intended to combat abuse through injection and snorting — something that’s all-too-common and often deadly with painkillers.
Deaths from prescription painkiller overdoses soared between 1999 and 2013, with fatalities rising 400% in women and 265% in men, according to the Centers for Disease Control.
It’s great that PTIE may have something to help combat that tragic problem in Remoxy, but the more practical problem for the company itself will be finding a partner to market and sell the drug for it. It has no revenue of its own, so it’ll either have to take out a ton of debt, deplete its $40 million cash balance, or team up and pay a licensing fee to a partner.
The lowest-risk of those is the partnership, and with PTIE already having lost Pfizer in October, it may not be such an easy task to find one.
As of this writing John Divine held no positions in any of the stocks mentioned. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
