The U.S. Food and Drug Administration on Friday denied Endo Health Solutions' petition to block generic forms of its widely abused prescription pain drug Opana ER, a surprise decision by an agency that has recently come down hard on pain drugs to prevent their abuse.
Prescription drug abuse leads to more deaths in the United States than heroin and cocaine combined, according to the U.S. Centers for Disease Control and Prevention.
The company had argued that its reformulated version of Opana ER, a powerful opioid painkiller containing oxymorphone, would be more difficult to abuse than the original version, and therefore asked that generics of the earlier version be barred from the market.
However, the FDA determined that the original formulation of the drug had not been withdrawn from the market for reasons of safety or effectiveness and so its generic forms could continue to be approved and marketed. (r.reuters.com/huj97t)
The regulator also noted that reformulated Opana ER could still be manipulated for abuse in certain ways and that one of the new version's post-marketing investigations had raised the possibility that it may be more susceptible to abuse via injection than the original.
The agency's decision comes a month after it said it would not approve any generic versions of the original form of the pain medication OxyContin, which was widely abused because it could be crushed and then snorted or injected to produce a quick high.
That decision had led many analysts to expect that the FDA would side with Endo against the generics.
This expectation was also due to the formulations of Opana ER and OxyContin being very similar, said RBC Capital Markets analyst Shibani Malhotra.
"Implicitly, what the agency has done by not blocking Opana ER generics is (to say) that there is no benefit to using Opana ER when there are generics available," Malhotra said.
Endo said in a statement that it would explore all options to mitigate the effect of the FDA decision.
Opana ER brought in sales of about $299.3 million to Endo in 2012, down 22 percent from the earlier year because of the introduction of cheaper, copycats of the drug.
Following Friday's FDA decision, Endo said it estimates its 2013 net sales from Opana ER would fall by about $120 million, reducing operating profit by about 55 cents per share.
Michael Tong of Wells Fargo said the decision was a positive for Impax Laboratories Inc, which markets all strengths of generic Opana ER.
Endo shares closed down 5 percent at $34.97 on the Nasdaq on Friday. Impax shares closed up 8 percent at $17.40.
Trading in Endo shares were suspended for about 5 minutes at 1521 ET, as the stock started falling after the FDA posted its decision on its website.
Nasdaq said the trading pause was erroneous and that it is "investigating the root cause of the issue and will take steps to prevent a future reoccurrence."
The stock was halted again at 1539 ET ahead of Endo's press release.
(Reporting by Zeba Siddiqui in Bangalore, additional reporting by Pallavi Ail; Editing by Anthony Kurian)