Shares of Transcept Pharmaceuticals, Inc. (TSPT) jumped on Wednesday after it was revealed the U.S. FDA had approved its insomnia drug Intermezzo. The approval comes after three years of ups and downs marked by two resubmissions. The drug has been approved for middle-of-the-night insomnia followed by difficulty returning to sleep.
After concerns raised by the FDA in a Complete Response Letter in July, the company resubmitted the NDA, including new instructions stating that Intermezzo should only be taken if patients have at least 4 hours of bedtime remaining, and that patients should refrain from driving for at least 1 hour after arising and until 5 hours after dosing Intermezzo.
Intermezzo (zolpidem tartrate sublingual tablet) C-IV is formulated as a sublingual tablet that contains a bicarbonate-carbonate buffer and is intended to be placed under the tongue. Zolpidem tartrate is classified as a Schedule IV controlled substance.
Transcept stated that 'Middle-of-the-night awakening and difficulty with falling back to sleep' is a form of insomnia that is estimated to affect millions of adults in the United States. The company said Intermezzo is the first and only prescription sleep aid indicated for this form of insomnia.
The potential market of sleep aids to treat middle of the night awakenings is estimated to be worth $1.9 billion to $3.4 billion.
The recommended dose of Intermezzo for non-elderly patients is 1.75 mg for women and 3.5 mg for men, taken only once per night. Women have a lower dose because they clear zolpidem from the body at a lower rate than men. The 1.75 mg dose is recommended for patients over the age of 65.
The recommended doses of other FDA approved zolpidem products range between 5 mg and 12.5 mg and are indicated for bedtime use.
In a sleep laboratory study and an outpatient study, treatment with Intermezzo after a middle-of-the-night awakening helped patients return to sleep significantly faster than placebo. The most commonly reported adverse reactions in these studies were headache, nausea and fatigue.
Intermezzo contains a low-dose of the active ingredient in Sanofi's (SNY) sleeping pill Ambien.
Transcept has agreed to FDA post-marketing commitments including a study of patient compliance with Intermezzo dosing instructions.
The company signed a licensing agreement with privately-held Purdue Pharma LP in 2009 for the development and commercialization of Intermezzo in the United States. Under the agreement, Purdue has until December 8, 2011 to notify Transcept whether it will proceed with the commercialization of Intermezzo.
Transcept will receive tiered base royalties on net sales of Intermezzo in the United States ranging from the mid-teens up to the mid-twenty-percent level and $90 million from Purdue upon achieving IP and U.S. net sales targets. Purdue paid a $25.0 million non-refundable license fee to Transcept in August 2009 when the commercialization deal was signed.
In July, the company had cut almost half its workforce after the FDA had denied approval citing concerns about impairment of driving ability. The FDA had first turned down Intermezzo in October 2009, on concerns about a continuation of the drug's effect the next day.
Transcept resubmitted Intermezzo to FDA in January this year, and had received a Complete Response Letter in July. On September 27, the company resubmitted the NDA after reducing recommended doses, and with new instructions.
Point Richmond, California-headquartered Transcept is currently conducting a Phase 2 study of TO-2061, a low dose ondansetron augmentation therapy for patients with obsessive compulsive disorder (OCD) who have not adequately responded to treatment with approved first-line pharmacotherapy.
Transcept stock had jumped from $3.00 to $6.00 between September 13 - 15 after it announced plans to resubmit the Intermezzo NDA. On July 13, the stock crashed to $4.94 from $8.59 the earlier day on news about the Complete Response Letter.
TSPT last traded at $7.36, up $0.75 or 11.35%, on the Nasdaq, having surged up over 28% earlier in the session. Over the past year, the stock traded in a range of $2.58 - 11.88.
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