Specialty pharmaceutical company Mallinckrodt Plc said its experimental painkiller significantly reduced the intensity of pain in patients who had undergone a surgical removal of bunions.
The drug, MNK-795, showed statistically significant improvement in pain scores over 48 hours, compared to a placebo in a late-stage trial.
MNK-795 would have to be taken only once a day unlike other generic combinations in the market. It is also designed to resist abuse.
"Mallinckrodt should be able to price it at a significant premium to the generic due to the abuse resistance and the fact that it's (dosed) once a day instead of twice a day," BMO Capital Markets analyst David Maris said.
The drug is a combination of two older pain drugs acetaminophen and oxycodone. The combination, already available as generics in the market, is highly addictive and often abused by snorting or by injecting into the muscles or veins.
Endo Pharmaceuticals' Percocet and Johnson & Johnson unit Janssen Pharmaceuticals' Tylox are branded versions of the drug.
Maris said MNK-795 sales could peak at $200 million by 2017.
Dublin-based Mallinckrodt, spun off from Covidien Plc in July, said common side effects associated with the drug included nausea, dizziness and headaches.
Shares of the company were up about 2 percent at $45.97 in afternoon trading on the Nasdaq.
(Reporting By Vrinda Manocha in Bangalore; Editing by Don Sebastian)