The reasons a green light is anticipated and how it relates to the closing of Avenue Therapeutics' pending acquisition are discussed in an H.C. Wainwright & Co. report.
In a Feb. 13 research note, H.C. Wainwright & Co. analyst Ed Arce reported that the U.S. Food and Drug Administration (FDA) formally accepted Avenue Therapeutics Inc.'s (ATXI:NASDAQ) IV tramadol 50 mg and set Oct. 10, 2020, as the PDUFA date for it. "We expect intravenous (IV) tramadol's approval by its PDUFA date," Arce added.
The biopharma's new drug application (NDA) for IV Tramadol called for the use of 50 mg in managing moderate to moderately severe pain in adults, in a medically supervised healthcare setting.
Arce indicated that H.C. Wainwright expects the FDA will approve this, based mainly on positive results from two pivotal Phase 3 trials. One study was of patients with hard tissue pain during recovering from bunionectomy, and the other involved patients with soft tissue pain following abdominoplasty. Another reason is that safety data submitted by Avenue Therapeutics in the NDA indicates that "tramadol abuse is uncommon and infrequent compared to other prescription opioids in the U.S. and European countries where IV tramadol is available," the analyst explained.
In other news, Arce pointed out, Avenue Therapeutics is "on the way to passing the final hurdles of its InvaGen Pharmaceuticals acquisition" but four conditions must be met, all related to IV tramadol, for the transaction to be closed.
The FDA must approve IV Tramadol with a broad label allowing its use "for moderate to moderately severe pain" associated with all types of surgeries. IV Tramadol must not have any risk evaluation and mitigation strategies or other restrictions placed on it, and it must be classified as a Schedule IV substance. Assuming Avenue Therapeutics achieves these requirements, noted Arce, shareholders as of April 2021 will be able to receive payment for their shares.
H.C. Wainwright has a Buy rating and a $12 per share price target on Avenue Therapeutics, whose stock is currently trading at around $9.99 per share.
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Disclosures from H.C. Wainwright & Co., Avenue Therapeutics Inc., First Take, February 13, 2020
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Ed Arce and Thomas Yip, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of Avenue Therapeutics, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of January 31, 2020 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Avenue Therapeutics, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from Avenue Therapeutics, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in Avenue Therapeutics, Inc. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.