For biopharmaceutical company NeurogesX's (NGSX), lead product, Qutenza, it was a pain-free passage through regulators as the prescription patch won the FDA approval Monday for reduction of postherpetic neuralgia. PHN or postherpetic neuralgia is a chronic painful condition that develops in certain patients following a herpes zoster (shingles) outbreak.
Qutenza becomes the first and only prescription strength treatment with capsaicin, the "hot ingredient in chili peppers". According to NeurogesX, Qutenza can provide 3 months of pain reduction from a single one hour treatment for post-shingles pain. The product is expected to be launched by NeurogesX in the U.S. in the first half of 2010. Qutenza has orphan drug designation for the management of neuropathic pain in patients with PHN.
The treatment of postherpetic neuralgia, or PHN, continues to represent a significant unmet need. According to market research firm Decision Resources, the neuropathic pain drug market will increase from $6 billion in 2008 to $9.7 billion in 2018 in the United States, France, Germany, Italy, Spain, the United Kingdom and Japan. Qutenza is estimated to fetch sales of nearly $700 million in 2018.
Qutenza also carries a fast-track designation for treatment of HIV-DSP (HIV-distal sensory polyneuropathy). The dermal patch has successfully completed one late-stage study in painful HIV-DSP.
In May, the European regulators approved Qutenza to treat peripheral neuropathic pain in non-diabetic adults. On June 22, NeurogesX entered into a commercialization agreement for Qutenza with Astellas Pharma Europe Ltd., the European subsidiary of Tokyo based Astellas Pharma Inc. The dermal patch is expected to be launched in the European Union in 2010.
The agreement also provided NeurogesX with EUR 30 million (about $42 million) for Qutenza commercialization rights, and EUR 5 million (about $7 million) for a license option of NGX-1998, the next-generation liquid formulation which uses the same active ingredient as Qutenza.
According to NeurogesX, NGX-1998 is being designed to treat neuropathic pain conditions such as postherpetic neuralgia, painful HIV-DSP and PDN (painful diabetic neuropathy) and has completed three phase I studies.
NeurogesX went public on May 2nd, 2007, pricing its IPO at $11 per share. In its first full year as a public company in 2008, the company's net loss narrowed to $26 million or $1.49 per share from $31.95 million or $4.06 per share in 2007.
The just-reported third quarter results showed that net loss widened to $6.8 million or $0.38 per share from $6.3 million or $0.36 per share in the comparable quarter last year. In connection with the Astellas Agreement, NeurogesX recorded ccollaboration revenue of $0.1 million for the third quarter of 2009, representing the first quarterly revenue.
Cash equivalents and short-term investments were approximately $57.0 million at September 30, 2009, compared to $13.4 million at June 30, 2009. The increase reflects the receipt of a $48.8 million upfront payment from Astellas received in July 2009.
NGSX, which has thus far hit a 52-week low of $0.89 and 52-week high of $9.20, closed Monday's regular trading at $8.24. In after-hours, following the FDA approval news, the stock rose 16.99% to $9.64.
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